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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.
Trading securities are classified as current assets on the balance sheet. SFAS No. 115 requires companies to carry trading securities at fair value and to include unrealized holding gains and losses on trading securities in income . Cash flows from purchases, sales, and maturities of trading securities are classified as cash flows from operating activities in the statement of cash flows.