Why does the requirement to hold equity securities traded in an active market at fair value not apply to all quoted investments?
An enterprise can, on an optional basis, measure any financial asset or financial liability at fair value by applying the fair value option set out in Financial Instruments, paragraph 3856.14. Fair value is not the mandatory measurement basis for quoted non-equity investments such as traded debt. Users have stated that they are often more interested in historical cost for debt instruments since they generally have a fixed term and private enterprises often hold such instruments to maturity.
