Zero coupon bond discount computation follows a monthly apportionment method based on bond life and previous-year inclusion. Pro rata discount on a zero coupon bond is computed by converting the bond's life into calendar months, counting a partial month of fifteen days or more ... Summary
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Zero coupon bond discount computation follows a monthly apportionment method based on bond life and previous-year inclusion.
Pro rata discount on a zero coupon bond is computed by converting the bond's life into calendar months, counting a partial month of fifteen days or more as a full month, and ignoring a shorter part. The total discount is divided by the resulting number of months. Where months fall within a previous year, the monthly amount is multiplied by the number of those months to determine the pro rata amount of discount for that year.
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