At acquisition an entity must classify a security within the scope of ASC 320 into one of three categories: trading, available-for-sale or held-to-maturity. The category designation of each security will determine the measurement basis (., amortized cost versus fair value) of the security and how it will be presented and disclosed in the financial statements. As entities decide on investment classifications, they should consider how those decisions may affect future business plans or opportunities. For example, an entity should consider the possibility that it might have to sell some of its securities to take advantage of a potential future.
