Unrealized gains: conclusions?

[Mike or Penny Novack]

Charles Day wrote:

>Now that we have all had a chance to chew on the recent unrealized gains
>discussions, I wonder if we might be able to come to some conclusions. Here
>is my list for your comments and/or additions.
>
>  
>
I have kept out of it so far because folks seem to be considering 
"unrealized gains" only in the context of "cash basis" and "trading". My 
opinion is that it is asking far too much to expect ANY automated 
bookkeeping system to decide how "gains" that do not involve external 
transactions are properly accounted. Among other things that depends 
upon ........

a) cash or accrual basis
b) type of business and laws pertaining thereto.

Just one example

It doesn't just depend on the sort of transaction. Because I am NOT in 
the "timber business", if every now and then I sell some "stumpage" 
that's an incidental capital gain reported when it happens and I do not 
have to report the increase of value of inventory. No unrealized gains 
form the annual growth of trees. But if I were in the "timber business" 
the sale of "stumpage" (or logs if I handled the felling operation too) 
would not be a "capital gain" and I would have to report the unrealized 
gain that growth represented (and get to charge "depletion" against it 
too). Required keep books using the "accrual" method.

Michael