@QBsguru wrote:
I disagree. Unrealized gains/loss are an OTHER INCOME account and reflect market changes. I would not touch equity since gains/losses are unrealized. You might want to set Unrealized Gains/loss as a liability account, but not an off-set to equity. The number in this account is not taxable income. It only becomes a tax item when the investments are sold and off-set by Realized gain/loss account. Have been doing it this way for 25 years and statements reviewed and audited by an independent CPA firm show this as acceptable GAAP treatment.
I could care less about the pseudo standard GAAP, this is small business and not subject the SEC regs.
Other income is a line item on the tax return, and is commonly used for things like sales tax discount income, reward point income, etc.
If you do post it to other income what is the offsetting entry? Do you use Other expenses too?
If an asset is not sold, how can an unrealized gain be income? the unrealized gain would increase assets it seems to me.
this article changes the name, but
https://strategiccfo.com/realized-and-unrealized-gains-and-losses/
and from the accountants community
Per the Form 1120 filing instructions for the Schedule L - Balance Sheet:
Line 26 - Some examples of adjustments to report on this line include:
- Unrealized gains and losses on securities held "available for sale."
https://accountants-community.intuit.com/articles/1613028-where-do-i-enter-unrealized-gains-for-a-bu...
