Debt Security Classification Tool
Under ASC 320, debt securities must be classified at acquisition into one of three categories — trading, available-for-sale (AFS), or held-to-maturity (HTM) — each with distinct measurement and OCI implications.
This tool applies the classification criteria and intent-and-ability assessment from ASC 320-10-25 to determine the appropriate category, including the tainted-portfolio analysis for HTM transfers and credit loss separation under ASU 2016-13.
Is the primary purpose of holding this debt security to generate profits from near-term price changes or interest rate movements?
Trading securities are bought and held principally for the purpose of selling in the near term. The entity has an active pattern of short-term profit-taking — not simply the potential to sell. A security that does not meet the definition of trading or HTM defaults to AFS (ASC 320-10-25-1).
How it works
Answer three questions about your entity's holding intent and portfolio history.
The tool applies the classification criteria in ASC 320-10-25-1 through 25-18 — starting with the trading intent test, then the HTM intent-and-ability assessment, including the tainted-portfolio check for prior HTM sales — and outputs the correct category with its measurement basis, gain/loss treatment, and applicable credit loss standard.