Gain definition
/What is a Gain?
A gain is derived from an increase in the value of an asset. It is considered to be realized if the asset is sold to a third party, resulting in a profit. A gain is considered to be unrealized if the asset has not yet been sold.
How to Calculate a Gain
The amount of a gain is computed by subtracting its book value from the payment received from its sale, less any commissions and processing fees. For example, if a company sells equipment that has a carrying amount of $20,000 to a buyer for $22,000, and pays a $500 commission to do so, then its recorded gain will be $21,500 (calculated as the $22,000 sale price, minus the $20,000 carrying amount, minus the $500 commission).