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    Assume BID=OFFER,

    day one, shares @ $10, you buy 10,
    day two, shares @ $8, you sell 5,
    day three, shares @ $9, you buy 1,

    what is the net PnL?

    Asked a few people, and they gave me different answers..,
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    Net loss of 10 surely? Rest is held in assets.
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    (Original post by Huskaris)
    Net loss of 10 surely? Rest is held in assets.
    ermm what? so net loss is the loss that is realized?

    day 1 - losses +0
    day 2 - losses +20 (10x2)
    day 3 - losses -5 (5x1)
    net loss = 15

    everything is marked to market here... i think that's the appropriate accounting treatment for shares in pretty much most circumstances (held as asset for sale or whatever its called)
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    (Original post by Teenage Pirate)
    ermm what? so net loss is the loss that is realized?

    day 1 - losses +0
    day 2 - losses +20 (10x2)
    day 3 - losses -5 (5x1)
    net loss = 15

    everything is marked to market here... i think that's the appropriate accounting treatment for shares in pretty much most circumstances (held as asset for sale or whatever its called)
    Very good. You have shown me why I am failing Financial Management Accounting.

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    (Original post by Teenage Pirate)
    ermm what? so net loss is the loss that is realized?

    day 1 - losses +0
    day 2 - losses +20 (10x2)
    day 3 - losses -5 (5x1)
    net loss = 15

    everything is marked to market here... i think that's the appropriate accounting treatment for shares in pretty much most circumstances (held as asset for sale or whatever its called)
    If it is held for sale, unrealised gains or losses aren't taken through the P&L but through equity instead. If they were held to maturity they would not realise any gain/loss till sale. Otherwise, they are trading securities/inv at FV, so it is all marked to market.
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    (Original post by oblivious)
    If it is held for sale, unrealised gains or losses aren't taken through the P&L but through equity instead. If they were held to maturity they would not realise any gain/loss till sale. Otherwise, they are trading securities/inv at FV, so it is all marked to market.
    Cheers
 
 
 
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