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Hello Mike!
Why do we recognised unrealised loss in the the SOCI and not in the income statement?
-A loss on impairment is an unrealised loss but it is recognised in the income statement.-In addition to that, the prudence concept also says that when a company is anticipating a loss as compared to a gain, then it should recognised that loss in the period in which it occurs.
Please clarify this.
Thanks in advance.
Your argument ignores the concept of depreciation – surely that too would satisfy your definition of the accounting treatment for unrealised losses
In addition, prudence says that a loss should be recognised as soon as it is anticipated
Again, to follow your suggestion would be to blow a hole in the treatment of forecast losses on construction projects
OK?
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