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All marketable debt securities are held at cost on a company's balance sheet as a current asset, until a gain or loss is realized upon the sale of the debt instrument. Marketable debt securities are held as short-term investments and are expected to be sold within one year. If a debt security is expected to be held for longer than one year, it should be classified as a long-term investment on the company's balance sheet.
For accounting purposes, the majority of debt and equity securities assets are classified either as investments in securities or marketable securities. Securities assets are considered marketable securities if two conditions apply: 1  There is an active, accessible market for the securities.