While defining an interest class for either the bills module, you can indicate whether the interest component is to be considered for discount accrual on a constant yield basis.

The value for this field is defaulted from the Interest Definition and it can be changed here.

For bearing type of contracts, all future interest cash flows are considered for computation of constant yield. For discount type of contracts, only the interest amount received for the components with the ‘Consider as Discount’ option enabled are considered for the computation of constant yield; subsequently the interest amount received in advance for these components is amortized over the tenor of the associated contract.