Unrealized gains and losses are referred to as paper gains or losses. The accounting treatment of the unrealized gains depends on the amount you own.
Under the fair value method, record in your earnings unrealized gains and losses for tradeable debt and equity – securities you plan to sell within 12 months. For securities available for sale, report unrealized gains and losses as other comprehensive income, which appears below net income on the income statement. You accumulate other comprehensive income as a separate line on your balance sheet's owners’ equity section.
A Schedule M-3 is required in place of a Schedule M-1 when Schedule L assets are the end of the year equal to or exceed $10 million. You are not required to file the M-3 unless your assets meet the requirements to file.
For more information on unrealized gains and losses, see the link below:
Unrealized Gains & Losses
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