Held To Maturity Security

AAA

DEFINITION of 'Held To Maturity Security'

Accounting standards necessitate that companies classify any investments in debt or equity securities when they are purchased. The investments can be classified as held to maturity, held for trading or available for sale. A held to maturity security is a debt or equity security that is purchased with the intention of holding the investment to maturity. This type of security is reported at amortized cost on a company's financial statements and is usually in the form of a debt security with a specific maturity date.

INVESTOPEDIA EXPLAINS 'Held To Maturity Security'

Unlike held for trading securities, temporary price changes are not shown in accounting statements for held to maturity securities. Since stocks do not have a maturity date, they cannot be classified as held to maturity securities. The interest income received from a held to maturity security is run through the income statement, however the gains and losses go through comprehensive income until it is realized.

RELATED TERMS
  1. Capital Gains Treatment

    The specific taxes assessed on investment capital gains as determined ...
  2. Generally Accepted Accounting Principles ...

    The common set of accounting principles, standards and procedures ...
  3. Investment

    An asset or item that is purchased with the hope that it will ...
  4. Maturity

    The period of time for which a financial instrument remains outstanding. ...
  5. Stock

    A type of security that signifies ownership in a corporation ...
  6. Return On Assets - ROA

    An indicator of how profitable a company is relative to its total ...
Related Articles
  1. Careers In The Derivatives Market
    Options & Futures

    Careers In The Derivatives Market

  2. 5 Basic Things To Know About Bonds
    Bonds & Fixed Income

    5 Basic Things To Know About Bonds

  3. Boost Bond Returns With Laddering
    Bonds & Fixed Income

    Boost Bond Returns With Laddering

  4. 5 Equity Derivatives And How They Work
    Options & Futures

    5 Equity Derivatives And How They Work

Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  3. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  4. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  5. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  6. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
Trading Center