Amortization of a TIP security is based on the original Current TIPS Quantity and Cost.
Cost is calculated as:
Current TIPS Quantity on Settlement Date * Purchase Price
Par Value is calculated as
Current TIPS Quantity on Settlement Date * 100.
In the previous example described in Process Buys of ILB Securities Example:
The Entity TIP Demo
- bought 1,000,000.00 Original Face and 1,121,290.00 Current Face
- of security 9128272M3,
- for a Cost of 1,131,101.29 USD;
Therefore, Eagle Accounting amortizes 9,811.29 over the life of the security
(1,131,101.29 Cost - 1,121,290 Par) = 9,811.29
Eagle Accounting stores the ILB Index Ratio and the original face of each lot from the settlement date of each lot. Eagle Accounting does not save the Current ILB Quantity. It is calculated on the fly when earnings or reports are run. See the following two figures, which show the Eagle Accounting holdings record for a TIPS security.
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