"This approach would more closely align the amortization period of premiums and discounts to expectations incorporated in market pricing on the underlying securities. In most cases, market participants price securities to the call date when the coupon is above current market rates (that is, the security is trading at a premium) and price securities to maturity when the coupon is below market rates (that is, the security is trading at a discount) in anticipation that the borrower will act in its economic best interest. As a result, the proposed approach would more closely align interest income recorded on bonds at a premium or a discount with the economics of the underlying instrument," said the FASB in the exposure draft. 

The FASB is accepting comments on the proposal until Nov. 28.