A type of security that represents an amount of debt that the holder (buyer/ investor) expects to get back in full, in addition to any amounts of interest that would arise over its term to maturity. The key terms or defining factors for a debt security are notional amount, interest rate, and maturity date.

Debts securities are financial assets whose owners/ holders are entitled to receive- from the other party, i.e., a borrower/ issuer, a stream of interest payments over the lifespan of the security. Debt securities require the borrower/ issuer to repay the principal amount at maturity or in installments (in addition to interest payments) over their lifespan. Debt securities include bonds, notes, bills, or money market instruments that are issued by governments or the private sector.

Debt securities are classified in groupings, for the purpose of accounting, including held-to-maturity debt securities (debt securities that are purchased with the intent and ability to be held until maturity), and available for sale (AFS) debt securities (debt securities that are purchased with the intent and ability to be re-sold). AFS securities are classified as such if specific criteria are met 1) designation of non-derivative financial assets as available for sale and 2) non-classification of non-derivative financial assets as as i) held-to-maturity (HTM) investments, ii) financial assets at fair value through profit or loss (FVTPL), iii) loans and receivables.