What is the real value through profit or loss?

real value by profit or loss is a way to determine the value of assets and liabilities in the balance sheet. It is a valuation method, which is mainly used to appreciate financial instruments. These types of assets have a value that is constantly in the flow due to market changes. The use of this method allows the company to take over the real value of the financial instrument at the time when it was purchased or recognized, and to make changes in its value in books whenever the balance sheet is generated by billing the real value changes in profitability.

The concept of the real value is an accounting standard for valuing assets that do not have a market value. The only way to definitely determine market value is to sell an asset. Determination of the real value allows the company to monitor the asset in the accounting system for tax purposes without having to sell it. It is an estimate that takes into account the types of factors that would affect the value if the asyl sold.

There is a special procedure set by the National and International Councils for Financial Accounting Standards for determining the real value of financial instruments that are held as assets or liabilities. The problem with financial assets includes their changing market value. For example, stock markets can be volatile and shares held by corporations can change the value several times per day. Similarly, corporate obligations, such as bonds issued, also change value because government interest rates are increasing or decline.

Accounting standards allow corporations to appreciate the assets and obligations by determining the real value by profit or loss. This method of determining the value is one of the four ways that the company usually uses to categorize financial assets and one of the two ways to categorize obligations. Assets can be categorized as transported on air festnot through profit or loss or intended as available for sale, receivables orLoans or "held in maturity" of investment. Liabilities can be classified by transmitted with a real value by profit or loss or by transmitted for the amortized liability costs.

Assets and liabilities that are carried out on books with a real value through profit or loss are subcategories according to its destination or possession for trading. The specified asset or commitment is the one that has been selected for appreciation in this way when it was obtained. Asset or responsibility held for trading is valued by means of this method, but will only be held for short -term.