Why is B wrong? - Financial Reporting and Analysis

reported, following, understand, net

Analysts should be wary of which of the following equity transactions a company may use to manipulate its reported earnings to reflect a higher net income? A company can move shares that have appreciated in value from:

A) available-for-sale to the trading portfolio.

B) held-to-maturity to the trading portfolio.

C) trading to the available-for-sale portfolio.

Your answer: B was incorrect. The correct answer was A) available-for-sale to the trading portfolio.
I understand why A is correct, and I was wondering about A or B, but went with B. Isn't that pretty much the same reason. The held to maturity would also increase in value and could be moved to trading portfolio to recognize the gains. Why is this wrong??? Anybody??

defour44

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发表于 2011-7-13 13:29 | 只看该作者

You're technically not allowed to move something from Held To Maturity to Trading, unless something REALLY legit comes up. If accounting govern bodies see your Corp doing this they will never allow you to classify anything for Held-to-Maturity again, and you will be the laughing stock of the neighborhood.

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