The report said, 'In the worst case, a limited recovery rate could indicate that the interventions led to major irreversible losses, as in the case of Cyprus, with a holding loss
for the government on equity instruments amounting to 10.
Since beginning of privatization process, the successive governments have successfully sold out a large number of public sector entities and also divested government holdings but a question often arises, why the government is selling its stake in profit making entities and still holding loss
If reasonable expectations are that the price of land will remain stable in the future, and that sales of two parcels per year at $90,000 each can be expected to continue, it is necessary to isolate the realized holding loss included in income and remove it from the earnings base:
Replacement cost of parcels sold $60,000 Cost of sales $100,000 Realized holding loss (net of taxes) $24,000 Net income $48,000 Realized holding loss (net of taxes) $24,000 Operating income $72,000
By contrast, the BOJ recorded its first current-account deficit in 32 years, mainly due to a huge holding loss
Because market prices have declined, the taxpayer may have little or no gain for regular tax purposes, but may have a holding loss
for AMT purposes.
If a net holding loss
exists, a deferred tax asset is recorded.
For equity security A, the unrealized holding loss
is as before, $4,000.