The Argument for Measuring Held-To-Maturity Debt Securities at Amortized Cost

question 32

Multiple Choice

The argument for measuring held-to-maturity debt securities at amortized cost and ignoring most changes in fair value during the contractual term of the debt is/are

• A)changes in fair value are not relevant if the firm has the intention and ability to hold the securities to maturity.
• B)firms would recognize impairment losses because of conservatism.
• C)firms would recognize impairment losses because of impairments due to changes in default risk that reflect changes in the amount the investor is likely to receive.
• D)all of the above
• E)none of the above