Fdez

Apart from that making the most transparent category (HFT) incredibly opaque, isn’t the problem that you wouldn’t necessarily be selling at a loss - and so there would never be any unwinding of previous false and accumulated gains?
To continue my example, let’s say at the end of year 10 the company sells the bond at fair value for ￡1.2m. The initial purhase price, also the carrying value, is ￡1m, so the company books a realized profit that year of ￡200k. That profit joins the ten years of coupons and the ￡2m of ten annually repeated unrealized “growth” gains of ￡200k. Nowhere does a balancing loss register, because unrealized and realized gains accumulate indifferently for HFT assets - the only way to prevent this would be to adjust the carrying value to reflect the fair value. But this brings us back to the original problem, which is what to do with the amortized value, if indeed we are required to amortize for HFT…