Accrued Income

When a fixed interest stock is bought or sold there is an element of interest in the purchase or sale price. For instance, if a bond pays interest twice-yearly on 31st December and 30th June, and a holder sells on 30th November then the price received allows for the fact that there is only one more month to wait until the next interest payment arrives. So, the sale price includes 5 months’ interest. Accrued Income should not be confused with Accrued Interest.