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Amortization Method

Use this category type setting to determine the amortization method used for debt securities. Amortization method is used in the Amortization and Accretion report calculations, and it impacts cost basis calculations, which you see throughout Tamarac.

You can choose:

Scientific Method versus Straight Line Amortization

The following table describes some of the differences between scientific method and straight line amortization.

  Scientific Method Amortization Straight Line Amortization
Security Types

  • Most fixed income securities. Although the Scientific method is generally recommended for amortizing fixed income securities, there are exceptions.

  • Mortgage-backed securities

  • Fixed income securities
Adjustment Distribution Adjustments gradually increase each period Adjustments evenly distributed across all periods
Requirements

For each trade lot being amortized:

For each trade lot being amortized:

  • Beginning cost basis
Learn More Scientific method Straight Line method

Learn More

For more information about categories and category types, see Security Categories.

For more information about setting up and using amortization, see Workflow: Set Up Securities and Accounts for the Amortization and Accretion Report.