The so-called "amortized cost method" means that the appraised object is listed at the purchase cost, and is evenly amortized at the coupon rate or agreed interest rate during the remaining period, taking into account the premium and discount at the time of purchase, and the income is accrued daily.

At present, there are three main valuation methods of bond funds: cost method, market method and amortized cost method. The cost method is mainly used for the valuation of inter-bank bond investment, but this method may lead to a serious deviation from the fair value of the fund. The market price rule is mainly used for exchange bonds. However, because the closing price may be abnormal and fluctuate frequently, this method is easy to reduce the stability of the fund's net value and is not conducive to guiding investors to make long-term rational investment.

Prospect of amortized cost method

For fund investors, especially money market fund investors, "amortized cost method" is a familiar term. Investors often see this term not only in money market funds, but also in fund contracts of short-term debt-based funds and even bond funds. It seems that this valuation method seems to be a natural method.

Some people in the accounting field believe that the varieties invested by money market funds are highly liquid and can be regarded as cash, and their cost price and fair value will not deviate too much. At this time, it is feasible to adopt the amortized cost method supplemented by shadow pricing However, if the duration of short-term and medium-term debt is less than three years, the gap between its cost price and fair value will be relatively large, so it is obviously not appropriate to adopt amortized cost method.