Unrealized profits refer to sales within the group that have only been completed without actual external sales, such as sales from the head office to a subsidiary, or from company A to company B within the group. At this time, the profit is still within the group.

Yes, the real profit of the entire group can only be realized when the product is finally sold to units or individuals outside the group. Otherwise, the revenue from internal sales of A is the cost of B. This is the so-called unrealized internal sales profit.

Unrealized profits are relative to unrealized gains and losses, and there is no special reason for this. Unrealized gains and losses refer specifically to internal transaction gains and losses. Regarding internal transaction gains and losses, before the implementation of the new accounting standards, my country only limited the amount of profits and losses to the parent company. Accounting standards have been implemented for internal transactions with subsidiaries, and unrealized gains and losses will be fully offset to adjust consolidated net profit.

At that time, influenced by the parent company theory, minority shareholders' profits and losses were deducted when calculating consolidated net profit, so the offset of unrealized profits and losses would not affect minority shareholders' profits and losses; and for unrealized profits and losses from internal transactions between investment enterprises, associates and joint ventures

The processing is not standardized.

The "Interpretation of Accounting Standards for Business Enterprises No. 1" issued in 2007 further improved the equity method. The relevant concepts and provisions of the new standards have led to corresponding changes in the accounting treatment of unrealized gains and losses from internal transactions.

Realized profit: Realized profit refers to the transformation form of the enterprise's remaining product value.

In terms of corporate finance, it is expressed as the balance of the company's total sales or total service income after deducting costs and turnover taxes.

Before the reform of the economic system, the profit realized by an enterprise was not the main indicator for assessing the operating status of the enterprise, and employee wages were not linked to the realized profit. Therefore, the realization of profit could not be the main goal pursued by the enterprise, nor could it be the basis for the development of the enterprise.

Main motivation.

Since the reform of the economic system, this situation is undergoing fundamental changes.

However, issues such as how the state and enterprises distribute profits and how to regulate the use of profits retained by enterprises after they are handed over to the state still depend on the development and improvement of the "profit-to-tax" and contracting systems.

In terms of profit distribution, it should be developed in a direction that is conducive to the independent operation of enterprises and the responsibility for their own profits and losses.