It is not necessarily a profit, because it is a temporary increase and decrease, with both increases and decreases.

Trading financial assets are investments made by enterprises for short-term profits, so their fair values ??must be fully included in current profits and losses; while available-for-sale financial assets are not held for short-term profits, but are subsequently measured at fair value.

, so its normal fair value changes are allowed to be included in equity first, and will only affect profits and losses when disposed of.

However, if a significant decline in fair value does not affect profits and losses, it will mislead investors. Therefore, the standards stipulate that impairment provisions must be made at this time and included in profits and losses; "held-to-maturity investments" are investments that the company intends to hold for a long time.

, short-term increases and decreases in its value are of little significance to the enterprise, and therefore are not reflected.

Gains refer to the inflow of economic benefits arising from non-daily activities of an enterprise, causing changes in owner's equity, and having nothing to do with the capital invested by the owner. Therefore, investment income is considered a gain.

Gains and losses from changes in fair value refer to the gains or losses caused by changes in the fair value of various assets such as investment real estate, debt restructuring, non-monetary exchanges, trading financial assets, etc. that should be included in the current profit or loss.

That is the difference between fair value and book value.

This item reflects the gains and losses arising from changes in the fair value of the assets during the holding period.

It is also the basis for filling in the item "Income from Changes in Fair Value" on the new income statement.

According to the relevant provisions of the new accounting standards, the closing book value of a trading financial asset is its fair value at that point in time, and the difference between it and the previous book value, that is, the amount of changes in fair value, needs to be included in the current profit and loss.

Now the Ministry of Finance and the State Administration of Taxation clearly stipulate in the notice that when calculating taxes, "gains and losses from changes in fair value" during the holding period will not be considered. Only at the time of actual disposal, the difference in the price obtained after deducting its historical cost will be considered.

Included in the taxable income during the disposal period, it can be seen that the tax basis of trading financial assets is still its historical cost.

By presenting gains and losses from changes in fair value, the income statement comprehensively reflects the company's income, which is specifically divided into operating income and non-operating income.

Investors can understand the profit and loss caused by the change in fair value of the company and its proportion to the company's total income, so as to better analyze and make decisions.

In addition, under the original system, the income generated by some special businesses was included in the owner's equity of the balance sheet but was not reflected through the income statement, such as asset appraisal appreciation and debt restructuring gains. There will be some cases that bypass the income statement and are directly included in the assets.

Problems with the balance sheet have caused the balance sheet and income statement to lose their inherent logical connection.

By presenting the profit and loss items from changes in fair value, the income statement fully reflects this income, and it also provides a method to coordinate the inherent relationship between the balance sheet and the income statement.

Extended information: Definition of trading financial assets: According to the accounting standards for the recognition and measurement of financial instruments, financial assets or financial liabilities that meet one of the following conditions should be classified as trading financial assets or financial liabilities: 1. Obtain the financial assets.

The purpose is mainly to sell or repurchase in the near future.

For example, stocks purchased for short-term holding can be used as trading financial assets.

2. It is part of a portfolio of identifiable financial instruments that are managed centrally, and there is objective evidence that the company has recently used short-term profit-making methods to manage the portfolio.

If a fund company purchases a group of stocks for the purpose of short-term profits, the group of stocks should be treated as trading financial assets.

3. It is a derivative instrument.

That is to say, under normal circumstances, purchased futures and other derivatives should be regarded as trading financial assets, because the purpose of derivatives is to trade.

However, derivatives that are designated as effective hedging instruments, derivatives that are financial guarantee contracts, and are linked to equity instrument investments that are not quoted in an active market and whose fair value cannot be measured reliably and must be settled by delivering the equity instrument.

The exception is derivatives, as they cannot be traded at any time.