Why not hold the securities backed by performing assets and not report losses?
FASB requires a write down of these assets (EITF Abstract Issue No. 99-20) and has been inundated with requests, mostly from the banking community to change this requirement. However, a corporate doesn’t typically hold these securities to maturity, but sells them for liquidity. With the bad market, if a corporate sold their securities now the losses would exceed the current losses being taken and those losses would be permanent.
