The gain/ loss in value that is generated by holding an asset over a period of time. It arises when the value of an asset increases/ decreases over time, and as such it relates to retaining ownership of it. For a liability, it is the decrease / increase in value that results in gains/ losses accruing to the owner over time. Generally speaking, positive or negative holding gains/ losses may accrue during the reporting period on financial and non-financial assets and liabilities purely due to changes in their prices.

Holding gains/ losses are not treated as actually realized gains/ losses under accounting practices because such a treatment defies the revenue recognition principle and the cost principle.

Holding gains/ losses are also known as capital gains/ capital losses.