Overview

paper profit


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A profit shown by the books or accounts of an organization that is not a realized profit. This is usually for one of three reasons: because the value of an asset has fallen below its book value; because the asset, although nominally showing a profit, has not actually been sold; because some technicality of book-keeping shows an activity to be profitable when it is not.For example, a share that has risen in value since its purchase might show a paper profit but this would not be a real profit since the value of the share might fall again before it is sold.

because the value of an asset has fallen below its book value;

because the asset, although nominally showing a profit, has not actually been sold;

because some technicality of book-keeping shows an activity to be profitable when it is not.

Subjects: Financial Institutions and Services — Accounting.


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