Accounting Dictionary

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Held-to-Maturity Investments

Definition: Under international financial reporting standards, a held-to-maturity investment is a nonderivative financial asset having either fixed or determinable payments and a  fixed maturity, and that an entity has both the ability and the intention to hold to maturity. It does not include financial assets that the entity designates as being at fair value through profit or loss, as available for sale, or as loans or receivables.

An entity cannot classify any financial assets as held to maturity if it has sold or reclassified more than an insignificant amount of held-to-maturity investments before maturity during the current fiscal year or the two preceding years. This restriction does not include reclassifications that were so close to maturity or the asset's call date that changes in the market interest rate would not have significantly impacted the asset's fair value, or those for which the entity had already collected substantially all of the original principal, or those caused by an isolated event beyond the entity's control.