REPO trading day

REPO seller shall deliver bonds, fill trading amount received from buyer in the account of ‘selling of REPO bonds’ of short-term debt account, and re-assort collateral transferred to buyer from commodity (investment) bonds to ‘REPO bonds’.


REPO buyer shall receive bonds, fill money paid to seller in the account ‘buying of REPO bonds’ of short-term lending, and deal secured debt provided by seller with notes.

Spot trading of REPO buying bonds

The seller, who sells secured bonds at spot market (spot selling) after buying REPO, shall be responsible for returning the bonds concerned by purchasing at spot market on the repurchase day so that the responsibility of restoration shall be recorded as ‘financial liability’.


In case of substitutive payment of interest, the substitutive payment is offset by the financial liability. When purchasing the bonds in the spot market, the financial liability shall be debited, and, after comparing the latest evaluation value with the purchasing price of bonds, profit or loss is reflected into ‘evaluated profit & loss of REPO trading’ account. Following spot trading of buying bonds, the seller is liable to make voluntary payment of withholding tax for interest accrued during spot trading period, and thus, the seller shall enter the amount concerned into ‘tax on interest income' account and then debit at the time of paying it to tax office.

Expiration of REPO

Accounting procedures at the time of Expiration of REPO trading are divided into 3 kinds as follows

Expiration of REPO
Kind of expiration of repo trading Accounting procedures
Normal expiration or Early repurchase by refusal of exchange Seller/buyer offset trading amount and repo buying/selling account and appropriate the refunded interest for payment/income commission account
Cash settlement or early repurchase by settlement default Seller/buyer deal repo trading bond based on spot selling/buying
Early repurchase by early refund Seller deals repo trading bond based on spot selling and buyer appropriates cash by early refund for debt account and offset in case of repurchase