How are the investments in a 2a-7-like investment pool reported in the external investment pool's report?

Investments in a 2a-7-like investment pool are reported at amortized cost. This method of reporting aligns with the accounting standards established for such investment pools, which typically emphasize stability in reporting over reflecting market fluctuations. Amortized cost allows for investment values to remain relatively stable, making it easier to manage for users of the financial statements who may be more interested in liquidity and overall stability rather than variable valuation based on market conditions.

Under this approach, the cost of the investment is adjusted for amortization of premium or discount and becomes a preferred method as it reduces volatility in the reported values of the assets in the pool. Since 2a-7 funds are designed to provide stable net asset values, reporting them at amortized cost reflects their intended purpose of maintaining liquidity while offering a reasonable yield.

In contrast, market cost would reflect the current market value which could result in larger fluctuations in reported values, thereby not providing the consistent reporting needed for participants relying on predictable cash flows. Discounted present value of estimated future cash flows is a more complex valuation method typically used for specific types of investments rather than for the pools in question. Lastly, the notion that a separate display is never permitted does not correspond to the requirements for reporting these investment pools;