If the requirements of FAS 140 are not met, then the transaction must be recorded as a sale of a held-to-maturity security
If an entity decides to sell a held-to-maturity security and reclassifies it as available-for-sale, the unrealized holding gain or loss to the transfer date should be recognized as a separate component of shareholders' equity.
If a decline in fair value of an available-for-sale or held-to-maturity security is determined to be "other than temporary," then the security's cost basis should be written down to fair value and the realized loss should be included in earnings.
If, for example, a held-to-maturity security matures (or is likely to be called) within the next year or operating cycle, whichever is longer, then the security should be included in current assets.
Thus, the sale or transfer of a held-to-maturity security due to one of the following changes in circumstances should not be considered inconsistent with its original classification:
A change in statutory or regulatory requirements significantly modifying either what constitutes a permissible investment or the maximum level of investments in certain kinds of securities, thereby causing an enterprise to dispose of a held-to-maturity security.
In addition, other events that are isolated, nonrecurring and unusual for the reporting enterprise to sell or transfer a held-to-maturity security withou necessarily calling into question its intent to hold other debt securities to maturity.