Held-for-trading is intended to mean securities you plan to trade short-term. Designated-at-fair-value has the same treatment as trading securities (e.g., unrealized gains and losses go through the income statement), but is applicable to securities you plan to hold for a long while.
Watch out guys : under IFRS, in the case of equity instruments calssified as AFS, the reversal CANNOT BE DONE via P&L. You can therefore show an increase in value but must treat it as any standard increase in value (goes to OCI). Effectively the reversal in P&L cannot happen.
There are no such constraints in respect of debt instruments (classified as AFS)
Vicky, this is just a case of wording. Under IFRS AFS equity impairment loss reversal cannot happen, i.e. you cannot reverse the loss taken to the I/S. But there is nothing to stop you reversing the fall in value presented on the balance sheet.
Jaychou, following changes made in 2008, IFRS actually allows you to take instruments out of the ‘held for trading’ category (in specific circumstances). It does not permit transfers out of the ‘designated as at fair value through profit or loss’ category. This issue has more to do with politics than with logic … it was one of the hotest accounting topics of late 2008.