Amount Realized
 |
Definition of 'Amount Realized'The gain or loss resulting from a sale of an asset. The amount realized encompasses all forms of compensation, including cash, the value of any property received as payment and any liabilities that the purchaser assumes as a result of the transaction.The amount realized does not include transaction costs such as commissions and other related fees. |
 |
Investopedia explains 'Amount Realized'To calculate the amount realized, simply take the difference of the total consideration given and subtract the cost basis. If the difference is positive, then the amount realized is a gain. If the difference is negative, the amount realized is a loss.The total consideration will also include any liabilities assumed, as in this example: Assume you have sold some property that has an outstanding mortgage of $75,000 to a buyer. The buyer pays you $40,000 and assumes the mortgage. In this case, you would have realized a total gain of $115,000 ($40,000 payment + $75,000 mortgage transferred). |
Related Definitions
Articles Of Interest
-
Capital Gains Tax 101
Find out how taxes are applied to your investment returns and how you can reduce your tax burden. -
To Sell Or Not To Sell
Learn some tips on how to exit a position to the best of your advantage. -
How are realized profits different from unrealized or so-called "paper" profits?
When buying and selling assets for profit, it is important for investors to differentiate between realized profits and gains, and unrealized or so-called "paper profits".Simply put, realized ... -
Depreciation: Straight-Line Vs. Double-Declining Methods
Appreciate the different methods used to describe how book value is "used up". -
Financial Statement: Extraordinary Vs. Nonrecurring Items
When it comes to analyzing a company, successful analysts spend considerable time differentiating between accounting items that are likely to recur going forward from those that most likely will ... -
Get A Career In Showbiz Accounting
An accounting career doesn't have to be boring. If you love numbers, but want excitement as well, consider the field of showbiz accounting. -
What Management Accountants Do
If you like keeping track of a company's income and expenses but also want to hold a position with significant responsibility and authority, management accounting could be the job for you. -
GAAP And The IFRS Standards Convergence Efforts In 3 Substantial Areas
Understand the specific steps that have been taken in hopes of converging the GAAP and the IFRS accounting standards, despite the philosophically and culturally based methodological differences ... -
Using The Price-To-Book Ratio To Evaluate Companies
The P/B ratio can be an easy way to determine a company's value, but it isn't magic! -
Small Business: Speed Up Receivables To Avoid A Cash Crunch
Waiting for customers to pay can be a losing game. Look to factoring for quicker cash.
Free Annual Reports
