Held-to-maturity (HTM)
Financial Accounting glossary · The Accounting Cycle & Financial Statements
Definition
Debt security classification where the company has intent and ability to hold to maturity; carried at amortized cost; gains/losses only on impairment or sale.
Held-to-maturity (HTM) in plain English
A 'debt security' is basically an IOU you buy — like a company or government bond that promises to pay you back a set amount on a set date, plus interest along the way. 'Held-to-maturity' means the company buying that bond fully plans to keep it until that payback date, not flip it early for a quick profit. Because they're holding it to the end, they don't sweat the day-to-day ups and downs in its market price; on the books they just carry it at 'amortized cost' — roughly what they paid, gradually adjusted toward the payoff amount. They only record a gain or loss if they actually sell it early or if the borrower looks like they can't pay them back (impairment).
Also called: HTM
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