Investment accounts

This query is : Resolved

Share Report Follow Query Ask a Query

Querist : Anonymous

Querist : Anonymous (Querist)

01 May 2015 please explain Exinterest and Cum-interest in brief

Arpit Shah

Arpit Shah (Expert)
Follow

02 May 2015 Definition: Cum- Interest and Ex-Interest

The terms cum interest and ex-interest are predominantly used in the context of fixed income securities like bonds etc. Cum interest is the amount of interest accrued in the duration between the last coupon date and the settlement date or transaction date. In this regard, it is to be understood that the closing register date of the coupon is due. Hence, cum interest refers to ‘with interest’. The buyer of the transaction receives the full coupon payment is required to pay the portion which is not due to him to the seller.

Ex-interest is the amount of coupon interest between transaction date or settlement date and the next coupon date. In this regard, it is to be understood that the closing register date of the coupon is due. Hence, it is also known as ‘without interest’. Here, the seller is required to pay the portion of interest not due to the buyer since the seller has already received the full coupon payment. For e.g.

If bond trades from 30 April, 2012 to 30 November, 2012, the bond belongs to buyer on register closing date. Hence, the buyer will receive all interest and the seller must be refunded. This portion of interest is called cum interest. If bond trades from 30 November, 2012 to 30 April, 2013, the bond belongs to seller on register closing date. Hence, the seller will receive all interest and the buyer must be refunded. This portion of interest is called as ex interest.

https://www.mbaskool.com/business-concepts/finance-accounting-economics-terms/8619-cum-interest-and-ex-interest.html

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

Mohit Kumar

Konijarala prasad

Arvind Sharma

Titus

Ajinkya Deshpande

Subscribe Now

Investment accounts

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Manager- Finance and Compliance

CA Final

Accountant

Senior Executive

GST CONSULTANT

GST CONSULTANCY