- CFA Exams
- CFA Level I Exam
- Topic 3. Financial Statement Analysis
- Learning Module 11. Intercorporate Investments
- Subject 2. Investments in Financial Assets
CFA Practice Question
Held-to-maturity securities are reported at their:
A. Historical cost.
B. Amortized cost.
C. Fair value.
User Contributed Comments 3
| User | Comment |
|---|---|
| ThePessimist | It is not A because if debt is purchased at a premium or discount, that amount is amortized over the life of the bond. |
| dblueroom | For some reason I remembered held-to-maturity investments are reported at cost, which is actual account on the b.s. then you have a separate account for amortization. The combined amount should be the cost basis for calculating realized gain/loss upon sale. So you would only mentioned amortized costs when it comes to valuation. when you say it's recorded at amortized cost, it sounds like it's single account, in fact you have a separate account tracking the amortization. |
| edseven | The book example shows the gain = sales price less carry value and carry value is cost adjusted for the disc/prem |