trogulj

If it’s adjusted that way it would be another example of clean-surplus violation in which (un)realized GL being only in NI but not in Equity.
Sticking to the basis, clean-surplus relationship mean:
End BV = Begin BV + NI - Div
In case of AFS security, End BD has +unrealized GL, but NI doesnot
– unrealized GL only appears in the left side of the equation, but not in the left side
– clean surplus relationship is violated (ie: no more equation)
Hence, we need to + unrealized GL in the left side of the equation under NI