An unrealized holding gain is reported on the income statement when the fair value of an available-for-sale debt security exceeds its fair value reported in the prior period.

Available-for-sale

A classification of securities that are not actively managed for trading or held to maturity but can be sold for cash needs or other purposes.

Unrealized Holding Gain

Refers to an increase in the value of an investment that has not been sold yet, thus the gain is not "realized."