Compare the accounting for held-to-maturity and available-for-sale securities at a bank.

HTM securities are carried at amortized cost: rate-driven price changes are simply not recognized, and selling from the HTM book can 'taint' the whole portfolio, forcing reclassification. AFS securities are carried at fair value, with unrealized gains and losses recorded in AOCI within equity — they bypass net income but DO hit tangible book value each quarter. (Actively traded books are marked through the income statement, mainly at broker-dealers.) So the classification choice determines where duration risk shows up: in TBV every quarter (AFS) or nowhere until sale (HTM) — same economics, very different optics.