Section 2: 30–40%2E2
Financial Assets at Amortized Cost
Held-to-maturity debt securities are the simplest investment category to account for but have strict classification requirements. The exam tests the amortized cost method (effective interest), what disqualifies an entity from HTM classification, and CECL-based impairment.
What AICPA Wants You to Know
- 1Apply the intent-and-ability test for HTM classification
- 2Amortize bond premium/discount using the effective interest method
- 3Understand the 'tainting' rule when HTM securities are sold
- 4Apply CECL-based credit loss allowances to HTM debt securities