UK Accounting Glossary
A profit arising from revenue which has been earned by the entity and for which there is a reasonable prospect of cash being collected in the near future.
A profit that has been incurred in an investment but that hasn’t been realised yet because the investment hasn’t been sold, which would make it realised. Also called a paper profit.
The amount realised is used to calculate realised gains and losses. To calculate a realised gain or loss, simply take the difference of the total consideration given and subtract the cost basis. If the difference is positive, it is a realised gain. If the difference is negative, then its a realised loss.
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This glossary post was last updated: 23rd December 2018.