Day count convention

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Day count convention

A convention for determining the number of days between two dates and the number of days in a year, which are used for calculating interest accrued on bonds and other interest rate dependent securities. Also see actual/actual, actual/360, 30/360.

Day-Count Convention

An assumption used to calculate the frequency of coupon payments for a bond. This is used to calculate accrued interest and may therefore be important to the valuation of a bond, especially just before or just after the coupon date. There are two main day-count conventions. The 30/360 convention assumes that there are 30 days each month and 360 days in a year. On the other hand, the actual/actual convention uses the real number of days each month and year.
References in periodicals archive ?
Act 360 of 2009 allows the department to close any business that fails to remit withholding taxes for any three months during a 24-month period.
Act 360 allows the revenuers at the Arkansas Department of Finance & Administration to close any business that fails to remit withholding taxes for any three months during a 24-month period.