A decrease in the fair value of a security that has not yet been confirmed by the sale of the security is called a(n):
A) Contingent loss.
B) Realizable loss.
C) Unrealized holding loss.
D) Capital loss.
E) Market loss.

Question

Quizplus · Accepted Answer

An unrealized holding loss refers to a decrease in the fair value of a security that has not yet been confirmed by the sale of the security. This loss remains unrealized until the security is sold. Option A (contingent loss) generally refers to a loss that is dependent on a future event occurring or not occurring, while option B (realizable loss) refers to a decrease in the value of an asset that can be realized through a sale or disposal. Option D (capital loss) refers to a loss that results from the sale of a capital asset for less than the original purchase price, and option E (market loss) refers to a decrease in the overall value of a market or a particular security within a market.

A Decrease in the Fair Value of a Security That