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As the previous table indicates, if you set the Step Bond Utilize Bifurcation Method option to No Bifurcation Par Restricted or No Bifurcation Transcend Par, Eagle Accounting recognizes all the future cash flows at the time of the trade, and thus Eagle Accounting calculates the same yield throughout the life of the security. By recognizing all the future cash flows in the calculation of amortization yield, Eagle Accounting recognizes more amortization income in the earlier part of the bond's life (the security accrues interest at lower coupon rates up until 1/1/2020). Recognizing more amortization in the earlier part of the bond's life allows you to recognize a smoother stream of total income over the life of the security. As the rates increase, the bond recognizes less amortization. See the following figures.
The following figure reflects the Step Bond Utilize Bifurcation Method option set to Bifurcation.
The following figure reflects the Step Bond Utilize Bifurcation Method option set to No Bifurcation Par Restricted.
The following figure reflects the Step Bond Utilize Bifurcation Method option set to No Bifurcation Transcend Par.
