This statement is true. When the cost of the long-term debt security is different from the maturity value, the difference is amortized over the remaining life of a security.
The organization have an assortment of obligation instruments which are used to raise capital. Long-term debt are debt which takes more than one year to mature. An amortizing security is debt investment in which the portion of underlying principle amount is made to the security holders. Long term debt liability are the key compound of business solvency ratio. These are analyzed by stakeholders and the rating agencies when assessing solvency risk. Therefor, the statement is true.
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