realised profit

English Definition

Profit that has actually been earned and crystallised and can serve as the basis for distribution; it is legally distinct from an unrealised revaluation surplus. In most company-law regimes this distinction is binding, because a dividend may be paid only out of distributable — that is, realised — profit, and paper profit arising from revaluation cannot fund a distribution. In project finance the restricted-payments covenants that limit distributions to the sponsor are frequently tied directly to a realised-profit and cash test, so the mere revaluation of an asset on the books does not open the door to a cash distribution without the lender's consent — a discipline that keeps mark-driven equity uplift from becoming a leakage the debt cannot see.