Held to maturity investments (‘HTM’) are non-derivative financial assets with fixed or determinable payments and fixed maturity that an entity has the positive intention and ability to hold to maturity, other than:
Held-to-maturity investments are likely, in practice, to be a
restricted class since the decision to classify as HTM indicates
the investor is indifferent to future profit opportunities. For
example, a company might hold gilts or corporate bonds as a
long-term investment, but would be prepared to sell them if it
needed cash to finance a future expansion of the business. The
company could not classify the assets as HTM – it cannot
demonstrate the necessary positive intent and ability to hold them
to maturity.
Equity shares in a company do not have a "maturity date", so
they cannot be HTM investments.
HTM assets are stated at amortised cost, using the effective
interest method (
CFM16025).
