Set Up Entities for ILBs

You can set the ILB Gain Loss Flag (tag 3856) option at the entity/accounting basis level to determine whether ILB (inflation linked bond) gain/loss at maturity is booked to income or gain/loss. You can also set the No Negative Income Flag (tag 3857) option to allow no negative income at the entity/basis level for Identified Cost portfolios. That option applies to ILBs as well as to other types of debt securities. For general information about setting up entities and accounting bases, see Create/Edit Entity Panel Options and Add a Basis to a Portfolio Panel Options for Entities.

When you set up amortization/accretion rules, the Min ILB Ratio Flag (tag 3855) option determines whether the guaranteed minimum in deflation protected ILB (inflation linked bond) securities is used in determining daily ILB income. This is specific to the derivation of daily ILB income. The current ILB index ratio is used in accrual and amortization processing. For more information, see Amortization & Accretion Rules Panel Options.