Help! What is a R5.7bn unrealised loss?

[spacedaddy]

All of you forgive me. Guess I only know from 290 and up but what is a R5.7bn unrealised loss? What does it mean in respect of a "record R545m operating profit"? As a taxpayer did I make out or do I contribute again?

[B Sousa]

Thats where the Public does not realize they have been screwed even more than they originally thought. It happens here in the states all the time.
You then will realize some Ass*ole has also walked away from a position with more money than he could be paid had he/she worked there for 348 years 6 months.

[126.9]

As you've most probably guessed: you take a good shafting, and you're darn well grateful for it!!! :confused:

[BAKELA]

what is a R5.7bn unrealised loss?

:} I suppose when seeing the operating profit they did not realise they're actually making a loss - hence..."unrealised loss". :E Typical...

[126,7]

Eeiiisch
Ja Bakela, that sounds like the most likely reason for calling it "unrealised". Because it IS
:}

[Gerund]

spacedaddy

I am not sure in what context the 'unrealised loss' occurred, but a good example would be where a property in the balance sheet has, for some reason, depreciated below its original cost. So, for example, an office block was purchased for 5 billion whatever, and it is now worth only 3 billion.

Until it is sold there is no accounting 'loss' in actual 'money in the bank' terms. However, there is an 'unrealised loss' of 2 billion.

Standard accounting practice would be to reflect this as a deduction from profits, thereby writing down the value of the asset to today's value. However, it is an 'extraordinary' item and would be deducted in the profit and loss 'below the line', ie below the figure for normal 'operating profit'. After all, if you are analysing the success, or otherwise, of a businesss, the profits before extraordinary items is the critical figure as far as the present and future is concerned. You want to know the 'operating profit' and then to see what, if any, 'extraordinary items' may have an impact on the business.

Not a perfect answer, but I have been out on the town!

[spacedaddy]

Gerund,
So you're saying that it's not an actual loss at this time but somewhere in the future it actually counts against the operating profit figures? Maybe next year we'll see a billion in operating profit and an increased unrealised loss? HMMMM, Wonder if represents all the new airplanes not being allocated against the operating figures. Be nice if they could be open about it. Boy, am I dreaming.
Spacedaddy