What is the effect on the financial statements once securities are sold and the unrealized gains/losses are realized? How is this accounted for with both trading securities and available for sale securities? Do the “unrealized gains/losses” categories on each respective fiancial statement just turn into “realized gains/losses”?
unrealized gains and losses are typically recognized on comprehensive income statement, after the sale they will be recognized on income statement.
Acutally the unrealized holding gain/loss only apear in other comprehensive income for available for sale instruments. It will reverse after sell of the security. For trading securities, it is included in the income directly and won’t reverse after sell.
BlackDog Wrote: ------------------------------------------------------- For trading securities, it is > included in the income directly and won’t reverse > after sell. I’m not sure I understand this. Wouldn’t you recognize the gain twice if it did not reverse after sale ?