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from Schweser QBANK Question: same question - 2 different solution...which one is correct????

Fiduciary Investors held two portfolios for marketable equity securities:
?X $50 million in Portfolio A was accounted for as available-for-sale.
?X $50 million in Portfolio B was accounted for as trading securities.
Assume that Fiduciary transferred $10 million in trading securities from Portfolio B into Portfolio A. It was determined that subsequent to the transfer these securities had a market value of $8 million. If no previous write downs were made, Fiduciary must:
A) charge $2 million to its income statement.
B) do nothing to its income statement or equity section of its balance sheet.
C) charge $2 million to the equity section of its balance sheet.


Your answer: C was correct!
Reclassifications allow investment managers latitude in transferring investment assets from ?