Companies determine the cost of held-to-maturity securities as the present value of the future cash flows,discounted at the stated rate of interest.

Question

Quizplus · Accepted Answer

Held-to-maturity securities are recorded at amortized cost, not at the present value of future cash flows. The amortized cost is the purchase price adjusted for the amortization of any discount or premium over the life of the security.

Companies Determine the Cost of Held-To-Maturity Securities as the Present