Held To Maturity Security

What is a 'Held To Maturity Security'

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. 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.

BREAKING DOWN '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.

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