When I buy a bond, there is the clean price as quoted by the exchange/broker and there is the dirty price including the accrued interest in the bond since the last coupon was paid out.
How do I best reflect this transaction in PP?
There is a useful thread in German started by KlaPau which explains a workaround.
Summary in English:
Original Question by KlaPau
“How do I record the purchase and sale of a bond with accrued interest and percentage-based execution prices?”
Response by sebasbaumh (with example)
Sebasbaumh explains a workaround for recording a bond purchase:
- Purchase Details:
- Bought a bond at 99.05% of nominal value
- Paid €3.64 in accrued interest
- Broker charged:
- €990.50 for the bond
- €5.90 in fees
- €3.64 accrued interest
- Total: €1,000.04
- How It Was Recorded:
- Entered as 10 units at €99.414 = €994.14
- Added €5.90 fees
- No taxes
- Total matches broker’s charge: €1,000.04
- Noted: “Price 99.05% + €3.64 interest” for clarity
- Interest Payment:
- Recorded as a dividend:
- 10 units × €7.375 = €73.75
- No taxes
- Credited €73.75
- Recorded as a dividend:
- Bond Maturity:
- Recorded as:
- 10 units × €100 = €1,000
- No fees or taxes
- Credited €1,000
- Recorded as:
- Tip: Using 10 units simplifies price tracking (e.g., 99% = €99 per unit)
This method helps align bond accounting with how brokers report trades, especially when accrued interest is involved. If you’d like, I can help you adapt this logic into a Python script for automated transaction logging.