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Statistical Treatment of Accrual of Intereston Debt Securities
Author:
Mr. Chris Wright null

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Mr. John Joisce
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Series:
IMF Working Papers
Volume/Issue:
Volume 2001: Issue 132
Language:
English
Publication Date:
01 Sep 2001
DOI:
https://doi.org/10.5089/9781451855388.001
ISBN:
9781451855388
ISSN:
1018-5941
Pages:
42
Keywords:
WP; market price; balance of payments; current yield; income stream; debt security; National accounts; government finance statistics; interest; accrual; securities; fair value; historical cost; interest income; market condition; accounting practice; Personal income; Bonds; Financial statements
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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When new international statistical standards were published in 1993, one of the major changes to the recommended presentation of the system of national accounts and the balance of payments was the adoption of accruals reporting for income and expenditure. However, as countries have begun to implement these standards, questions have arisen about their exact interpretation in respect of interest flows associated with tradable debt, where the cash flow is fixed at the time of issue but where the price of the instrument fluctuates with market conditions. A clear consensus has yet to emerge. The paper explores the issues involved in using the alternative approaches, the so-called "debtor" and "creditor" approaches. The debtor approach uses the rate implicit at the time of issue, and the creditor approach, the current market rate. The paper concludes that the creditor approach is the only one consistent with accrual principles and market valuation for the debt outstanding. It reviews implications for national and sectoral saving from this approach.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund