Fixed-income mutual fund companies may soon have their yields deflated if a proposed rule from the American Institute of Certified Public Accountants (AICPA) of New York becomes effective. Although the AICPA claims it is still exploring the issue, industry insiders say the AICPA has already decided to enforce the rule and is awaiting an endorsement from the Financial Accounting Standards Board.

The rule, which would become effective December 2000, would require funds to amortize premiums and accredit discounts of bonds in their distribution yields. AICPA already made amortization of municipal bonds mandatory and now wants to extend the practice to corporate and federal bonds.

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