reclassification of securities

CFA Level II FRA
#1

Hi All,

I was reading about the reclassification of securities and was wondering why corporates would want to do it. All opinions are more than welcome

Thanks

#2

For example, available-for-sale securities’ unrealized gains are recognized in the comprehensive income statement, not in the P&L, so a company would want to reclasify that available-for-sale security to a held-for-trading one in order to recognize those unrealized gains in the P&L and boost net income.

You can surely find more incentives out there.