Sec.3-31b-11. Accounting treatment of bonds purchased at discount or premium

(a) Liquidity Fund

(1) When bonds are purchased at a premium, the amount of the premium shall be amortized daily on a straight line basis over the life of the bond. The amortization shall be charged against income daily.

(2) When bonds are purchased at a discount, the amount of the discount shall be accreted daily on a straight line basis over the life of the bond and shall be treated as income on a daily basis.

(3) Accretion income shall be distributed.

(b) Other funds

(1) When bonds are purchased at a premium, the amount of the premium shall be amortized monthly on a straight line basis over the life of the bond. The monthly amortization shall be charged against income.

(2) When bonds are purchased at a discount, the amount of the discount shall be accreted monthly on a straight line basis over the life of the bond. The monthly accretion shall be reflected as income.

(3) Accretion income shall not be distributed.

(c) When bonds purchased at a discount or premium are sold, the difference between the sale price and the purchase price or amortized or accreted purchase price shall be treated as a realized gain or loss under section 3-31b-10 of the Regulations of Connecticut State Agencies.

(Effective October 10, 1972; Amended September 30, 1998; Amended September 13, 2016)