unrealized loss


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Paper Loss

A loss on an investment that has not yet been realized. That is, a paper loss occurs when the current price of a security which is still owned by the holder is lower than the price the holder paid for it. As a result, it is possible that the paper loss might be erased if the price increases again. A paper loss represents a decrease in one's net worth, but it may or may not affect one's lifestyle. See also: Paper profit.

unrealized loss

The reduction in value of an asset that is being held compared with its original cost. An unrealized loss usually must be realized by closing out the position before it can be recognized for tax purposes. Also called paper loss. Compare realized loss. See also wash sale.

Unrealized loss.

If the market price of a security you own drops below the amount you paid for it, you have an unrealized loss.

The loss remains unrealized as long as you don't sell the security while the price is down. In a volatile market, of course, an unrealized loss can become an unrealized gain, and vice versa, at any time.

One reason you might choose to sell at a loss, other than needing cash at that moment, is to prevent further losses in a security that seems headed for a still-lower price.

You might also sell to create a capital loss, which you could use to offset capital gains.

References in periodicals archive ?
Unrealized losses. Suppose XYZ holds stocks currently valued at $20 million.
Since Security C's fair value at 12/31/93 wa in excess of cost, no unrealized loss or allowance for decline in long-term marketable equity securities was reported.
For debt securities, under current practice, no unrealized loss need be recognized.
If possible, the home with an unrealized loss should be sold and the home with the unrealized gain should become the principal residence of the couple.
One, which was not caused by the filing of a consolidated return, involved unrealized losses when P sells S.
Net loss for the quarter of $2.5 million, or a loss of $0.08 per common share, which includes the impact of a $605,000 unrealized loss on commodity derivatives, versus net loss of $1.3 million, or a loss of $0.04 per common share in the 2015 quarter, which included the impact of a $1.8 million unrealized gain on commodity derivatives.
Nissan attributed the sharp downward revision to the 76 billion yen unrealized loss that emerged on its securities holdings due to the stock market plunge -- the difference between the book and market value of the same securities.
Net loss for the quarter of $3.2 million, or a loss of $0.10 per common share, which includes the impact of a $1.2 million unrealized loss on commodity derivatives, versus net loss of $4.9 million, or a loss of $0.15 per common share in the 2015 quarter, which included the impact of a $1.6 million unrealized loss on commodity derivatives.
The reported GAAP net loss was determined based primarily on the following: $3.5 million of net interest income, $1.1 million of net servicing income, a net realized gain of $0.3 million on the RMBS portfolio, a net realized loss of $1.5 million on derivatives, a net unrealized loss of $5.2 million on derivatives, a net unrealized loss of $2.3 million on the Excess MSR portfolio, a net unrealized loss of $2.2 million on the MSR portfolio and general and administrative expenses and management fees paid to Cherry Hill's external manager in the aggregate amount of $1.5 million.
The total net realized and unrealized loss was (USD38,068,438) or (USD0.18) per share for the same period.
The value achieved through the sales represents a moderate improvement relative to the carrying value as of March 31, 2015, which reflected an unrealized loss of USD149 million.
Net realized and unrealized gains, for three months ended January 31, 2015 were USD9,380,765 or USD0.60 per share compared to net realized and unrealized loss of USD4,159,746 or USD0.27 per share for first quarter of fiscal year 2014.