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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.
What Does Short-Term Investment Mean? Short-term investments have two main requirements. First, they must readily be convertible to cash. This means that obscure investments in privately held companies couldnât be classified as a short-term investment. If it canât be sold easily and readily, it isnât a marketable security. Take a stock investment in a publicly traded company for example. Example