A relevant definition from the Accounting dictionary:
Realisation: Recognizing revenue at the time of sale of merchandise if a retail business, or at the time of rendering the service if a service business. At realization, the earnings process is complete because the transaction is consummated, selling price is determinable, cost of sale is known, and future costs can be accurately estimated. Realization also applies to recognizing a gain on the sale of a security.
http://www.answers.com/topic/realization

From Law dictionary:
Gain or loss realized = the difference between the amount realized on a sale or exchange of an asset and the taxpayer's basis in such asset.
(ibid)

Asset balances held are converted into cash (or cash equivalent) in order to cover the anticipated deficiencies (i.e., "insolvencies").