An Investment In Debt Securities is a financial product involving debts. Its value is based on the underlying asset and the interest rate. These investments can be a good choice if you are looking for steady income and a secure future. However, there are certain rules and precautions to be taken before investing in debt securities.
Investments in debt securities are traded and reported in the financial statements as assets and liabilities. They are measured at fair value and any changes in the fair value are recorded in earnings. A trading investment in debt securities is considered an operating activity since the cash flows associated with its purchase and sale are recorded as operating activities. In addition, an entity’s unrealized gain or loss is recorded in the income statement over the period it has held the security. The amount of the gain or loss is proportional to the movement of the fair value of the security during each reporting period.
Investment in debt securities is a good way to diversify your portfolio while supporting New Zealand businesses and social impact projects. These investments offer higher certainty of returns than shares and have a lower risk profile. Investment in debt securities is made possible through the public market called Catalist.
