FRA

[archived_user]

In case of AFS, why do unrealized gains/losses go to OCI but in case of trading, it goes to PnL?

 

[archived_user]

Because those are the (arbitrary) rules of accounting.

 

[archived_user]

No logic, is it?

 

[archived_user]

Nope.

 

[archived_user]

None of which I’m aware.
That’s the biggest problem with FRA: you have to memorize a (large) number of arbitrary rules.
Under US GAAP, interest expense is a non-operating expense, but interest paid is a CFO outflow. It makes no sense, and you have to know it.

 

[archived_user]

Ok …