Marketable securities (VMP): how to read them correctly?

A marketable security (VMP) is a financial instrument bought to invest surplus cash over the short term, with no strategic purpose. Recorded in class 50 of the French chart of accounts (current assets), it differs from an equity investment (class 26), which is held durably. At year-end, an impairment is recognised if its market value falls.

Updated March 2026 - Valeurs mobilieres de placement (VMP : marketable securities) are financial instruments acquired as short-term cash placements by companies that hold surplus liquidity. The French General Chart of Accounts (Plan comptable general, PCG) defines them as securities purchased with the intention of realising a gain in the near term : in other words, to put excess cash to work rather than letting it sit idle in a non-interest-bearing current account. Unlike equity investments held for strategic influence, VMP serve a purely financial purpose. For financial years beginning on or after 1 January 2025, the application of ANC regulation n°2022-06 (which amends the backbone of the French General Chart of Accounts, ANC regulation n°2014-03) has updated the accounting treatment of VMP disposals.

See also corporate cash investment strategy, cash management and analytical accounting.

A VMP is a financial security held temporarily by a company seeking to earn a return on excess cash. The defining criterion is intent: the company purchases these instruments to generate capital gains or financial income over the short term, not to gain control or influence over the issuer.

When the securities are shares, their classification depends first on the intention to hold them as a short-term placement. The 10% capital threshold acts as a simple presumption (article 221-3 of the PCG): above 10% of the issuer's share capital, the securities are presumed to be equity investments (titres de participation), a category that follows a different accounting and financial logic. Below that threshold, and absent any intention of durable ownership, they qualify as VMP.

The main types of VMP encountered in practice include:

• shares (account 503, split into 5031 listed securities and 5035 unlisted securities);
• other ownership-representing securities (account 504);
• bonds (account 506);
• Treasury bills and short-term deposit certificates (account 507);
• UCITS units (money market SICAVs, bond funds, equity funds) through account 508;
• other marketable securities and similar receivables (account 508).

All of these are recorded in class 50 of the PCG, placing them within current assets (actif circulant) on the balance sheet, under financial accounts.

VMP are shown under current assets, in the financial accounts section (class 50). This classification is not incidental: it signals that these securities are considered available or realisable in the short term, as opposed to financial fixed assets (class 26), which reflect long-term holdings.

In the balance sheet présentation, VMP are clearly distinguished from cash and cash equivalents (accounts 512 for the bank, 53 for petty cash). This distinction is essential for financial analysis. A company may display a high total of "VMP + cash" while having low immediately available liquidity, because some VMP cannot be converted to cash without delay or without capital loss risk.

Hayot Expertise insight: never conflate VMP and cash when analysing net treasury position. VMP carry market risk and liquidation delays that pure cash does not.

Quick decision: VMP, equity investment or cash?

The deciding factor is not the type of instrument but the holding intention and the time horizon. The same security can fall under two different logics depending on the company's intent.

Acquisition#

Upon purchase, VMP are recorded at their acquisition cost, which includes the purchase price of the securities plus all directly attributable costs (brokerage fees, commissions). The accounting entry débits the relevant class 50 account (503 for shares, 506 for bonds, etc.) and credits account 512 Bank or a third-party account.

Income génération#

VMP generate financial income that improves the company's financial result. Dividends received on shares and interest on bonds are recognised as financial income under account 764 "Income from marketable securities". This line feeds directly into the income statement and affects corporate income tax.

Year-end depreciation#

The principle of prudence requires that a depreciation provision be recognised when the market value of VMP falls below their carrying amount at the closing date. This depreciation is recorded by debiting account 68665 "Depreciation charges on VMP" and crediting account 590 "Depreciation of marketable securities".

Conversely, an unrealised gain (market value above acquisition cost) is never recognised. This is a direct application of the accounting prudence principle: probable losses are recorded, but expected gains are not.

Disposal of VMP#

Upon sale, only the net gain or loss is recorded. Since 1 January 2025, following ANC regulation n°2022-06, the accounts used are:

• account 7673 "Net gains on disposal of VMP" for capital gains;
• account 6673 "Net losses on disposal of VMP" for capital losses.

Any previously established depreciation provisions must be reversed through account 78665 "Reversals of VMP depreciation".

Consider a concrete example. A company purchases 1,000 shares at 40 euros each on 1 January N (40,000 euros recorded in account 503). On 1 September N, it sells these shares at 50 euros each. The recording is done in two steps: recognition of the 50,000 euro receipt credited to account 7673, and removal of the securities at their carrying value of 40,000 euros debited to the same account 7673. The net gain is 10,000 euros.

The applicable General Chart of Accounts stems from ANC regulation n°2014-03, amended by ANC regulation n°2022-06 (modernisation of financial statements) for financial years beginning on or after 1 January 2025. Among other changes, this reform renumbered VMP disposals (accounts 6673 and 7673). The accounts to know:

VMP are part of an investment policy that should be formally documented. Before any investment, the company must answer several questions:

• what portion of cash is genuinely surplus and available?
• for how long can this surplus be committed?
• what level of risk is the company willing to accept?
• what are the actual liquidation timelines for each instrument?

A money market SICAV offers near-immediate liquidity with minimal risk but modest returns. An equity fund may offer higher returns but exposes the company to significant volatility. Medium-term bonds carry interest rate risk if they need to be sold before maturity.

The classic mistake is investing cash needed in the short term : for supplier payments, payroll or tax deadlines : into illiquid or volatile instruments.

Representative example. An SME with a stable cash surplus places part of its liquidity in a money-market SICAV while keeping the rest available for its current deadlines (payroll, VAT, social contributions). The income received flows into account 764. A few months later, a delayed customer payment forces it to draw on its cash earlier than planned: the portion left liquid is enough, with the SICAV acting as a buffer. Had the same surplus been placed in a volatile equity fund, the forced sale could have crystallised a loss. The recurring lesson in client files: match the investment horizon to the real date the money will be needed again, never the other way round. (Illustrative example, not based on any real file.)

The French Financial Markets Authority (AMF) reminds investors that all financial investments carry risk. For corporate VMP, the main risks are:

• market risk: the value of securities can decline due to market conditions, interest rate movements or economic downturns;
• liquidity risk: some instruments cannot be converted to cash immediately or impose redemption delays;
• counterparty risk: the issuer may encounter financial difficulties affecting the security's value;
• interest rate risk: particularly relevant for bonds, whose value mechanically falls when rates rise.

These risks must be assessed and documented, particularly in the notes to the annual accounts where the company presents its valuation methods and any depreciation recognised.

Analysing VMP in a company's annual accounts requires cross-referencing several sources of information:

• the balance sheet: gross VMP amount (account 50), depreciation (account 590), and net value;
• the income statement: VMP income (account 764), gains or losses on disposal (accounts 7673 / 6673), depreciation charges and reversals (accounts 68665 / 78665);
• the notes: breakdown by type of VMP, valuation methods, depreciation amounts and their evolution, any off-balance-sheet commitments.

A manager or analyst who only looks at the net balance sheet figure would miss essential information: portfolio composition, risk level, investment policy and coherence with actual cash needs.

Hayot Expertise insight: never review VMP without verifying their time horizon, actual liquidity, risk level and coherence with your treasury policy. A high-performing investment on paper can become a management error if the cash was actually needed within 30 days.