Holding Gain


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Holding Gain

An increase in the value of an asset or a decrease in the value of a liability that occurs without any action on the part of the holder. For example, if the value of one's house increases from $100,000 to $150,000 over three years, one has a holding gain of $50,000 over that period. Holding gains improve one's net worth.
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Shares in Kingdom Holding gain 2 percent after announcing that it sold its interest in the Fairmont Hotel and Raffles Suites & Residences in Manila for $58.
In the previous example, the holding gain is the $40 increase in the inventory's wholesale value above the original cost of $100, while the marketing profit is the $110 difference between the $250 retail price and the current wholesale value of $140.
Note that the TS holding gain of $15,000 is reported as a component of income and that these securities are reported on the balance sheet at their fair value of $465,000 at the end of the first quarter of operations.
The primary difference between accounting for investments held for trading and accounting for available-for-sale investments is that any holding gain or loss to adjust the investment to market value is shown on the income statement for trading shares, while available-for-sale stocks' accumulated holding gains or losses are reported as a separate component of shareholders' equity on the balance sheet.
30, 1999 1998 1999 1998 (Pro Forma*) (Pro Forma*) Revenues $679,728 $204,272 $1,676,582 $209,182 Cost of sales 99,721 79,998 342,273 79,998 Gross profit 580,007 124,272 1,334,309 129,184 Expenses 1,539,308 508,087 3,490,249 1,7254,904 Net loss (1,001,275) (446,092) (2,197,908) (1,633,700) Other comprehensive income (loss), unrealized holding gain (loss) on investments (39,835) (35,361) 21,391 16,176 Comprehensive loss $(1,041,110) $(481,453) $2,176,517) $(1,617,524) Net loss $(1,001,275) $(446,092) (2,197,908) (1,633,700) Amortization of discount on Preferred stock (1,884,615) -- (3,217,713) -- Net loss applicable to common Shareholders $(2,885,890) $(446,092) $(5,415,621) $(1,633,700) Net loss per common share $(.
The change during the period in net unrealized holding gain or
Treasury Notes sold short as compared to an unrealized holding gain of $403,430 on U.
Adjustment to Market 2,000 Unrealized Holding Gain 2,000
In other cases, the revaluation adjustment is considered a holding gain and could be entered directly into a separate component of equity-like certain foreign currency translation adjustments-or flow through earnings or comprehensive income into equity.
According to SFAS 115, a holding gain or loss is the net change in fair value of a security exclusive of dividend or interest income recognized but not yet received and exclusive of any write-downs for other-than-temporary impairment.
The investment's change in fair value during 1994 of $300 is recorded, and the net holding gain of $200 is included in 1994 income.