Union Planters Union Planters is a Tennessee bank holding company (that is, a corporation that owns banks). (Union Planters is now part of Regions Bank.) Union Planters manages $32 billion in assets, the largest of which is its loan portfolio of $19 billion. In addition to its loan portfolio, however, like other banks it has signifi- cant debt investments. The nature of these investments varies from short-term in nature to long-term in nature. As a consequence, consistent with the requirements of accounting rules, Union Planters reports its investments in two different categoriestrading and available-for-sale. The following facts were found in a recent Union Planters annual report. Instructions

(all dollars in millions) Amortized cost Gross Unrealized gain Gross Unrealized losses Fair Value

Trading account assets $ 275 ----- -------- $ 275 Securities available for sale 8,209 $108 $15 8302

Net income 224

Net securities gains (losses) (9)

(b) How must Union Planters account for its investments in each of the two categories?