Here is the IRD tax document that is used to equalise earnings across reporting periods, with a worked example. This is something you need to understand if you wish to invest in bonds directly.
The following technical tax bulletin is sub-headed 'Determination G3: Yield to maturity method''
https://www.taxtechnical.ird.govt.nz...20211123023345
IRD example
(Cashflows shown in bold).
The input cost (what the
investment was
bought for) is quite clear:
$1,012,500 (12-03-1987).
The
total money received once the investment fully matures is also clear:
70k(15-05-1987)+70k(15-11-1987)+70k(15-05-1988)+70k(15-11-1988)+1,000k(15-11-1988) = $1,280,000 (total over time). The overall 'gain' made (including interest income and taxable capital gain) is $1,280,000 - $1,012,500 = $267,500.
Being changed is
when the income is being recognised. Not the amount of money being recognised.