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Asset Class: Bond’s

A continuing series that describes how MProfit handles specific asset classes and how you can benefit from it.
The current and maturity values for bonds are calculated based on the interest rate, frequency of interest payout and cumulative or payout option.
The current and maturity values of remaining bonds will be adjusted when you sell some bonds from your total holdings. The closing balance of bonds will be calculated based on the original purchase price and the remaining quantity. This balance cost will match with the balance in your books of accounts.
You can add transactions to your existing bond investments. The terms related to interest rate, frequency of interest pay-out, cumulative or pay-out options and maturity value will remain the same as original first investment. The current values and maturity values will be adjusted based on subsequent purchases.
There is also an option to add transactions related to interest payout, which will not have any affect on the current or maturity values. This transaction is helpful in computing the total gain from the investment and when calculating your annualised returns (XIRR).
You can decide to calculate the values of bonds based on two options:
1)    Set the value based on the interest rate
2)    Set the value by manually adding the bond price
The option to add cumulative interest is provided via the bonds transactions screen. Investors may want to pass this entry for tax calculation purposes. The accrued interest up to 31st March can be passed as a cumulative interest entry in MProfit.
MProfit is designed in such a way that there will not be any difference in current and maturity values of bonds even if you pass the cumulative entry at the end of any period.
Lastly, you can set the alert for the lock-in period (if any) as well as the maturity date for your bonds.

11 January, 2010