ASC 825-10-45-1A requires reporting entities to present financial assets and financial liabilities separately by measurement category and form of financial asset (i.e., securities or loans and receivables) on the balance sheet or in the footnotes.
In addition to the requirements for specific line items, reporting entities subject to Article 5 of SEC Regulation S-X (i.e., commercial and industrial companies) are required to present all amounts in excess of 5% of total assets separately on the face of the balance sheet or in a note in accordance with Regulation S-X Rule 5-02(17).
A reporting entity should present assets that are measured at fair value separate from similar assets that are measured at amortized cost basis on the face of the balance sheet in accordance with ASC 320-10-45-1, ASC 825-10-45-1A, and Regulation S-X Rule 5-02. To accomplish this, a reporting entity should present either:
  • The aggregate of fair value and non-fair value amounts in the same line item on the balance sheet with parenthetical disclosure of the fair value amount included in the aggregate amount; or
  • The fair value and non-fair value carrying amounts in two separate line items

While Regulation S-X Rule 5-02 requires a separate line item for "marketable securities," it refers to the disclosure requirements for current marketable equity securities prescribed by GAAP. Those requirements are detailed in ASC 321. For marketable securities other than equity securities, S-X 5-02 requires reporting entities to state parenthetically on the balance sheet or in the notes the basis for determining the aggregate amount presented on the balance sheet. Amortized cost basis is required to be disclosed if the securities are presented at fair value and, likewise, fair value is required to be disclosed if the securities are presented at amortized cost basis.
We believe complying with ASC 320 and ASC 321 satisfies the requirements of S-X 5-02 in that investments in debt and equity securities will be presented separate from other assets. We do not believe the term "marketable securities" is required on the face of the balance sheet.
See FSP 5.9.4 for information on the presentation of a subsidiary's investment in its parent's stock.
Example FSP 9-1 illustrates how a reporting entity may present debt securities on the balance sheet.
Presentation of marketable debt securities
FSP Corp has marketable debt securities at December 31, 20X7 consisting of securities classified as held-to-maturity with an amortized cost basis of $150 and a fair value of $160 and securities classified as available-for-sale with an amortized cost basis of $90 and a fair value of $100.
How should FSP Corp present these marketable debt securities on the balance sheet as of December 31, 20X7?
FSP Corp may present these marketable securities on the balance sheet as follows:
Securities at fair value (amortized cost basis is $90)
Securities at amortized cost basis (fair value is $160)
Reporting entities subject to industry-specific guidance under Regulation S-X, such as bank holding companies and insurers, have different reporting requirements with regard to balance sheet captions. For example, insurers are required to present fixed-maturity securities separate from equity securities on the face of the balance sheet. This chapter does not address industry-specific presentations. See LI 12.11 and LI 12.12 for additional considerations for insurance and banking entities subject to Article 7 or Article 9 of Regulation S-X, respectively.

9.4.1 Current and noncurrent classification

A reporting entity that presents a classified balance sheet (see FSP 2.3.4) should report individual debt securities classified as trading, available-for-sale (AFS), or held-to-maturity (HTM) as either current or noncurrent on an individual basis under the provisions of ASC 210, Balance Sheet. This is achieved by applying one of the following two approaches consistently.
The first approach is to classify securities based on their maturities (for debt securities) and the reporting entity’s reasonable expectation with regard to those securities (i.e., expectations of sales and redemptions). If the reporting entity expects to convert securities to cash within one year (or normal operating cycle), the securities should be classified as current assets. If this criterion is not met, the securities should be classified as noncurrent.
The second approach is to classify securities based on whether they represent the investment of funds available for current operations, as defined in ASC 210-10-45-1 and ASC 210-10-45-2. Under this approach, the reporting entity does not need to have a stated expectation to sell such securities within one year or normal operating cycle for such securities to be classified as current; however, the securities need to be available for use, if needed, for current operations.
As discussed in ASC 320-10-25-1(c), HTM debt securities are, by definition, those for which management has the intent and ability to hold to maturity. Therefore, classification of the individual securities as current or noncurrent is based on the maturity date or call date if exercise of the call within the next operating period or fiscal year is probable. For example, HTM securities that mature within one year are classified as current.
Investments in securities or advances made for the purposes of control, affiliation, or other continuing business advantage are excluded from the definition of current assets in ASC 210-10-45-4. Therefore, securities held for such purposes should be classified as noncurrent.
Expand Expand

Welcome to Viewpoint, the new platform that replaces Inform. Once you have viewed this piece of content, to ensure you can access the content most relevant to you, please confirm your territory.

signin option menu option suggested option contentmouse option displaycontent option contentpage option relatedlink option prevandafter option trending option searchicon option search option feedback option end slide