Gain or loss happens when you sell. Thus the loss or gain on paper is only a status. However this is used in marking your position to market and necessary action or provision is made for this paper loss, in a prudent financial managment. If there is paper gain no action is taken.

paper profit

UNREALIZED INCOME (paper profit) is profit which has been made but not yet realized or collected through a transaction, such as a stock which has risen in value but is still being held. also called unrealized gain or unrealized profit or paper gain or book profit. UNREALIZED LOSS is a term that commonly refers to the write-down of an investment portfolio resulting from applying the lower of cost or market value on an aggregate basis. On a short-term portfolio, the unrealized loss is shown on the income statement. On a long-term portfolio, the unrealized loss is presented as a separate item in the stockholder's equity section of the balance sheet. Capzper

business man/women might use it so they can manage there paper work shop keepers might you it to organize there work and the profit and loss

There are a couple of risks that are generally considered only a paper gain or loss. One of these risks is a loan.