realized profit/loss

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A profit or loss that has arisen from a completed transaction (usually the sale of goods or services or other assets). In accounting terms, a profit is normally regarded as having been realized when an asset has been legally disposed of and not when the cash is received, since if an asset is sold on credit the asset being disposed of is exchanged for another asset, a debtor. The debt may or may not prove good but that is regarded as a separate transaction. Compare paper profit.

Subjects: Financial Institutions and Services.

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