Required information Investments in debt securities that don't fit the definitions of the other reporting categories are classified as available-for- sale. They are reported at their fair values. Holding gains and losses from retaining securities during periods of price change are not included in the determination of income for the period; they are reported as a separate component of other comprehensive income in shareholders' equity. Comparison of the HTM, TS and AFS approaches Classification Description Reporting in Balance Sheet Accounting for Unrealized Holding Gains and Losses on Debt Investments Not recognized; fair value is in a note to the financial statements Amortized cost Held-to-Maturity Securities (HTM) "Positive intent and ability" to hold debt Securities to maturity Trading Securities (TS) Intent to actively tradi or sell securities to earn profits on short- term price fluctuations Recognized in net income (closed to retained earnings as part of shareholders' equity) Fair value Available-for-Sule Securities (AES) Investment in debt that does not qualify as held-to-maturity or Iruding Recognized in other comprehensive income (closed to accumulated other comprehensive income as part of shareholders' equity) Knowledge Check 01 Match the type of debt security with the proper accounting approach. TERM (Each period's changes in fair value are recognized in other comprehensive income Reported at amortized cost in balance sheet Gain (or loss) realized at the time of the sale has no impact on net income DEFINITION AFS HTM TS