When the cost method is applied to an investment in debt securities, such as bonds, it is referred to as:

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The cost method applied to an investment in debt securities, such as bonds, is referred to as the amortized cost model. Under this method, the investment is recorded at its original cost and is gradually adjusted for amortization of any premiums or discounts on the bond over the life of the investment. This method is commonly used for investments in debt securities that the investor intends to hold until maturity, as it allows for stable reporting of returns and avoids volatility in the reported value of the investment.

When the Cost Method Is Applied to an Investment in Debt