Question about Assets as reported vs account balance

Joost 't Hart joost.t.hart at
Thu Jan 6 12:45:46 EST 2011

On 01/06/2011 06:26 PM, Derek Atkins wrote:
> "Joost 't Hart"<joost.t.hart at>  writes:
>> What I am still looking for is how to xfer the unrealized gains at the
>> end of the year. The become "realized gains" and should end up at some
>> equity account.
> As I said in my previous email, unrealized gains don't actually exist.
> There is nothing to "transfer".  Even at the end of the year the gains
> are still not "realized".  You don't realize a gain until you sell the
> asset whose value has increased.
> For example, you buy 10 shares of stock on Jan 1, 2010 for $10/share (so
> a total purchase of $100).  On Dec 31, 2010 the share price is
> $15/share, so you have an unrealized gain of $5/sh * 10sh = $50.
> However this $50 doesn't exist.  It's only on paper.  However you don't
> sell the stock until Jan 4, 2011, at which time it dropped back to
> $12/sh, so you get $120 for a realized gain of $20.

Derek, thanks for the answer. I got this. But now the simpler case.

My bank account is an asset (right?), worth, say 1000. That is my equity.

Now I do my job for a month and the boss pays me another 1000 
(income::salary), by depositing on my bank account. So assets and income 
have increased by 1000.

This shows in GC, in both the profit&loss and in the balance sheet, as 
unrealized gains.

Yet, I have nothing to sell, do I? At year end I may have some money 
left, and want to add that to my equity, at next year start...

>> I do not know how to accomplish this, preferably without nullifying
>> income and expense accounts...

I gave this another thought: Nullifying in one (big) split transaction 
may actually be the way to do so. First add a new "General reserve" 
equity account and make the delta of the split transaction go there....


>> For what it's worth it; cheers,
>> Joost.
>> Please remember to CC this list on all your replies.
>> You can do this by using Reply-To-List or Reply-All.
> -derek

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