What is Held-to-maturity securities?
In short
Held-to-maturity securities are debt securities the investor has the positive intent and ability to hold until maturity. They are carried at amortized cost, net of an allowance for expected credit losses.
Key takeaways
- Changes in fair value are not recognized, only disclosed.
- Selling or transferring them before maturity, except in narrow circumstances, can call into question the classification of the remaining portfolio.
- Equity securities can't be held-to-maturity, because they have no maturity.
Where it's tested
FAR: Investments (Debt & Equity Securities) — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Which classification requires both the positive intent and the ability to hold the security to maturity?