I think I'm confusing myself on this... What is a realised gain and what is an unrealised gain? What would be an example of each? (I know this is something I really ought to know... but with CA1 it seems there's so many things I'd like to be more sure about but no time to go and double-check everything!) Thanks in advance
Some1 please correct me if im wrong.... Say you buy a share for $1. Then the next day its market price goes up to $2. THen in theory you have made a capital gain, however, this is unrealised since you haven't actually received this extra money in any form. If you sold the share for $2 then you have crystallised the asset and actually made a capital gain of $1, this is a realised capital gain. If you are subject to capital gains tax then you will be taxed on this $1 profit. Realised/Unreadlised capital gains are discussed in the accounting part of CA1. I think what it is getting at is that in both circumstances the overall balance sheet position will be the same. (i.e. assets increase by $1). However, the gain has been secured and taxed if it is realised.
