What Category Is Unrealized Loss Income on an Income Statement?

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Unrealizd loss income can be found in a very particular category on an income statement. Find out what category unrealized loss income is on an income statement with help from a personal finance professional in this free video clip.

Part of the Video Series: Money Management
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Video Transcript

Hi, my name is Andrew Schrage, co-owner of Themoneycrashers.com, personal finance website, and today we're going to discuss how to categorize unrealized income loss on your income statement. Now, the most common scenario where this arises is when you've purchased a security or securities that have gone down in value but you still own those securities and therefore, have not realized that loss. As a result, you have a loss but because it's not what's called a paper loss, you still need to report it with a special line item on your income statement in the operating income section. You'll want to create a line item called income holding loss on your income statement. Here is where you'll put exactly what the unrealized loss was and to calculate this you'll first start with your cost basis which is what you originally paid for the security or securities and subtract the current market value of that portfolio and you'll end up with a negative number. You'll then take that number and put it into this line item in parentheses to show that it's a negative number. Once again this is Andrew Schrage, co-owner of Themoneycrashers.com website talking about how to categorize unrealized income loss on your income statement.


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