Where to record unrealized gains and losses on trading equity securities?
For an equity security that has been classified as “trading”, any unrealized gains or losses resulting from the change in fair value will be recorded directly into the income statement.
For example, if the fair value on December 31, Year 1 was $100 and on December 31, Year 2 the fair value was $200, then the company would record an unrealized gain in the income statement of $100. Remember, the gain is only “realized” when the equity security is sold.
Back To All Questions