Type of calculation of yields based on returns

Type of returns on bonds   Cash Basis Accrual Basis Provisioning Basis Real Time Basis
Definition Returns are calculated based on the return made actually against promised or assured Returns are made based on the promised or assured sum of the bond Returns are calculated based on the sovereign ratings of a country, that adjusts discounts The actual amount that is reflected on a real time, in lieu of provisions
Usage Used in discounts Used in during assurance Based on the level of default of a country and the reach for unreturned sum The actual sum returned at a premium or discount for a bond
Notes Done on the assurance of return Done on the assurance of the promised sum Done based on the amount left Done on the sum returned and completed
Present time or based on future Based on present time Based on future time Based on the future time Based on the present time

Yields on Bonds

There are a few types of returns on bonds that we take care of, for future accruals or returns, inviting discounts or premiums.

During the cash basis, premium or discounts are calculated based on actual sum returned initially. During the accrual basis, the discounts or premiums are calculated based on sum assured in the future. To provision, returns on bond are calculated based on the discounts or premiums that can be fetched based on the returns expected. In the real time basis, the yields are calculated based on the real time.

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