TNAG-2475-FCO40-3605-Hong-Kong-exchange-fund-report-and-accounts-for-1991-1992 — Page 45

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g. EXCHANGE FUND BILLS ("Bills")

Allotment.

Allotments of Bills to recognised dealers are

brought to account at the various accepted tender prices on

the day of allotment.

Redemption. Redemptions of Bills are brought to account at

par on maturity.

Purchases. Bills purchased are brought to account at the

amortised value which is the discounted value of the face

amount at the average accepted tender yield for the period

from the date of purchase to the maturity date of the

Bills. The difference between the purchase cost and the

amortised value is accounted for as capital gain or loss.

Sales. Bills sold (including the sale of Bills reserved for

dealing purposes by the

the Exchange Fund at the time of

allotment) are brought to account at the amortised value

which is the discounted value of the face amount at the

average accepted tender yield for the period from the date.

of sales to the maturity date of the Bills. The difference

between the sales proceeds

proceeds and the amortised value is

accounted for as capital gain or loss.

Year end valuation. Bills outstanding at the year end are

valued at the amortised value which is the discounted value

of the face amount at the average accepted tender yield for

the period from the year end to the maturity dates of the

Bills. The difference between the book value and the

amortised value So determined is debited as an

expense in the Income and Expenditure Account.

interest

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