Real holding gains/losses (K.11.2)

6.47 Definition:

The real holding gain (K.11.2) on an asset is defined as the difference between the nominal and the neutral holding gain on that asset.

The real holding gain (RG) on a given quantity q of an asset between times o and t is given by:

RG = G − NG or

RG = (pt / po − rt / ro) × po X q

The values of the real holding gains on assets thus depend on the movements of their prices over the period in question, relative to movements of other prices, on average, as measured by the general price index.

6.48 Real holding gains are recorded in the real holding gains/losses account, which is a sub-account of the revaluation account of the sectors, the total economy and the rest of the world.