paper profits (or losses) from securities owned, which actually have not been made or collected. Also called paper gain or loss. Accounting rules state that unrealized losses of marketable securities caused by a market decline must be recognized in the holder's income statement, even though the securities or futures contract have not been sold. In banking, this applies only to trading account assets held by a bank for its own trading account or a third party. Paper profits in an investment portfolio or trust account are realized when the securities are sold.
profit or loss that has not become actual. It becomes a realized profit (or loss) when the security or commodity future contract in which there is a gain or loss is actually sold. Also called a paper profit or loss.
