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Marketable security classifications: AFS, trading, held to maturity (CFA Series: balance sheet)

The key difference among the three classifications (available for sale; trading portfolio; and held to maturity) is the treatment of unrealized gains or losses. For example, assume a company owns a coupon-paying bond that increases in value due to a decline in interest rates: * If trading portfolio, the value increase is recognized on the income statement as an unrealized gain and the balance sheet (i.e., Both B/S and I/S) * If available for sale, the value gain is not recognized on the income statement but rather as other comprehensive income (OCI) under equity which, by definition, grows equity but not income (i.e., balance sheet only) * If held to maturity, the unrealized gain is not recognized on either statement (Neither!)
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