A gain from holding an asset and the gain has not yet been reported in the financial statements. As an example, assume that a company purchased land many years ago and continues to hold the land. The land was purchased at a cost of $20,000 but is now appraised at $300,000. Because of the cost principle and the revenue recognition principle, the land will be reported at its cost of $20,000. The holding gain of $280,000 is not realized or reported until the company sells the land.
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For the past 52 years, Harold Averkamp (CPA, MBA) has
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