how realized gains work
realized gains and unrealized gains vary considerably realized gains are those that have been actualized by selling an existing position for more than what was paid for it an unrealized paper gain on the other hand is one that has not been realized yet realized gains result in a taxable event but unrealized gains are typically not taxed they add to an asset s originally reported book value at the time of purchase and can occur on all types of assets and investments held by a company balance sheet eliminationrealized gains may occur through the sale of an asset when a company chooses to eliminate it from the balance sheet asset sales can occur for various reasons and purposes and are reported on the financial statements of a company during the period in which the asset sale takes place asset sales are regularly monitored to ensure the asset is sold at fair market value or arm s length price this regulation ensures companies are valuing the sale appropriately in the marketplace and takes into consideration whether the asset is sold to a related or unrelated party 