Guys, do not understand what is the problem with AFS. It is as simple as it is! This is very similar to HTM which is valued at amortised cost. What you do with AFS is first you calculate amortised cost for this and the change goes to income statement and this is your interest income (this is in most cases different than coupon, only in case you purchased the security at par interest income equals coupon; when purchase price is different from par value your interest income is coupon adjusted by change in premium/ discount on the bond). Afterthat you calculate fair value of the bond and the difference between fair value and amortised cost is the part that goes to OCI. Is it now clear? I can tell you this is how it works in reality as I do some investment valuation under US GAAP.