---
title: "How does LUSID calculate amortisation and accretion?"
slug: "how-does-lusid-calculate-amortisation-and-accretion"
tags: ["amortisation"]
updated: 2026-07-31T11:05:39Z
published: 2026-07-31T11:05:39Z
canonical: "support.lusid.com/how-does-lusid-calculate-amortisation-and-accretion"
---

> ## Documentation Index
> Fetch the complete documentation index at: https://support.lusid.com/llms.txt
> Use this file to discover all available pages before exploring further.

# How does LUSID calculate amortisation and accretion?

The concept of amortisation and accretion involves adjusting a bond's cost basis and simultaneously recognizing P&L over the period a bond is held.

- **Amortisation** When you purchase a bond at a premium (purchase price *above* maturity value), LUSID amortises that premium between the bond's settlement date and maturity date. Amortisation involves adjusting the cost basis (price paid) for a bond towards maturity value for each day the bond is held. It *decreases* both the cost basis of the bond and reported interest income over time.
- **Accretion** When you purchase a bond at a discount (purchase price *below* maturity value), LUSID accretes that discount between the bond's settlement date and maturity date. Accretion involves adjusting the cost basis (price paid) for a bond toward maturity value for each day the bond is held. It *increases* both the cost basis of the bond and reported interest income over time.

For simplicity, and to reflect standard practice, the amortisation of premium and accretion of discount are together referred to as *amortisation* for the remainder of this topic.

LUSID can calculate amortisation for the following types of instrument:

- [Bond](/v1/docs/modelling-fixed-rate-vanilla-bonds-in-lusid)
- [ComplexBond](/v1/docs/modelling-complex-bonds-in-lusid) (coming soon)
- [InflationLinkedBond](/v1/docs/modelling-inflation-linked-bonds-in-lusid) (coming soon)

By default, amortisation is disabled. To enable it, [choose an amortisation method](/v1/docs/choosing-an-amortisation-method).