The market value of a held-to-maturity debt security will fluctuate, based on market inter- est rates. Also, if the credit rating of the borrower changes, the market value of the invest- ment will fluctuate, as the risk attached to future cash flow is changed. This, again, changes the risk premium appropriately included in the discount the value of an invest- ment falls below its acquisition cost, assets may be overstated. Conservatism might dictate loss recognition. However, since the security is not held for sale, and its maturity value is assured,market value is not a relevant measurement attribute. Therefore, the loss is not rec- ognized in net.
