on p252 of curriculum.
Because if they are labeled trading, then they are supposed to be part of the firms day to day operations. It would make sense for an investment bank to report a good chunk of its securities as trading or available for sale. However, we would not expect a manufacturing firm to report the securities it bought, because it has excess cash, to be part of its operations and thus affect CFO or net income. Thus there is an option for the manufacturing firm to label them as held to maturity and avoid the variability in its income statement.
“Thus there is an option for the manufacturing firm to label them as held to maturity and avoid the variability in its income statement.” If a firm labels as available for sale unrealized gain/loss will flow through comprehensive income rather than net income so it too would avoid the variability in the income statement.