Overview
Many companies that produce a product or service do not carry invenstments or securities on their books. At times however, these companies may need to retain some assets that they anticipate they will need at some point in the future for which they do not want to leave uninvested. For banks an other financial firms, holding securities
Most assets on the balance sheet are held at cost. However, the existence of active markets for securities and well developed valuation models means that there are alternatives to holding these assets at cost.
Investment Types
- Fixed Income: accounting for instruments that are structured like a loan or a bond.
- Equities: accounting for holding securities that represent ownership in a company.
- Derivatives: accounting for holding derivative securities.