[moogatwo]

When a security gets moved from one B/S category to another does the gain or loss on revaluation go on the I/S? I know that the unrealized gain or loss is accounted for based on how the security is reclassified (trading – afs, afs-htm, ect) but what about the gain or loss on the initial revaluation at the reclassification date?

Reg: 7/29/11 (89)
AUD: 8/30/11 (95)
FAR: 10/31/11(88)
BEC: 1/10/12 (86)

[kandisjoy]

Can you give an example? From what you typed, it sounds like you're just moving a security from one category to another… Like from Asset Backed to Agency or something along those lines. If that were the case, you would just be relcassifying so no revaluation is needed.

If you were reclassifying from Held for Sale to Held for Trading, I'd assume that you would need to realize all of the unrealized gain/loss at that time. You'd move it from the balance sheet to the income statement. Which is why the words “held for trading” are taboo around my work. I only work with Available for Sale securities.

I don't remember this from CPA studies.. haven't studied FAR in a long time. But I do handle securities for my employer so that's where I'm drawing my conclusion from.

FAR: 71, 77
BEC: 70, 82
AUD: 62, 78
REG: 71, 68, 85

CA Licensed 11/2011

[moogatwo]

You want to reclassify from trading to AFS at 6/30/x2.

Purchase price at 1/1/X1 150,000

FMV at 12/31/x1: 155,000

FMV at 6/30/x2 145,000

FMV at 12/31/x2: 140,000

So would the 10,000 loss at the reclassification date go to the income statement? I know the 15,000 loss at 12/31/x2 is going to be in other comprehensive income since the security is now AFS.

Reg: 7/29/11 (89)
AUD: 8/30/11 (95)
FAR: 10/31/11(88)
BEC: 1/10/12 (86)

[markiux88]

Correct.

1. Write off (CR) HFT @ recorded FV

2. Write on (DR) AFS @ current FV

3. Recognize unrealized (holding) gain (CR) or loss (DR), if any, in NI

[Author]

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