Held-to-Maturity Debt Securities: Amortized Cost vs. Fair Value

Debt securities that are accounted for at amortized cost, not fair value, are held-to-maturity debt securities.

Held-to-maturity securities represent investments in debt that the company intends to hold until they mature. Because of this long-term intention, they are not subject to the same short-term fluctuations in value as securities intended for trading. Therefore, they are accounted for using the amortized cost method, which reflects the gradual amortization of any premium or discount over the life of the security.