Accounting Dictionary

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

Income Bond

Definition: An income bond is a bond that pays interest only if the issuing entity has earned income. The income can be tied to total entity earnings or to specific projects. If the bond terms indicate that interest is cumulative, then interest will accumulate during non-payment periods and be paid at a later date when income is available for doing so. Non-payment does not necessarily mean that the issuing entity is in default.