As stipulated by the IRDA vide its circular dated July 29, 2011, the formula for computation of the Net Asset Value per Unit (NAV) for Linked funds stands modified.
Old formula as prescribed by IRDA and as contained in the policy document:
Market value of the investment plus / (minus) expenses incurred in the purchase / (sale) of assets plus current assets and accrued interest (net of fund management charges) less current liabilities and provisions, divided by, number of units outstanding under the fund at valuation date (before creation / redemption of units).
Modified formula as stipulated by IRDA effective August 18, 2011:
Market value of the investment held by the fund plus value of current assets less value of current liabilities and provisions, if any and divided by the number of units existing on the valuation date (before creation/redemption of units).
The provisions on NAV computation as available in the unit linked policy documents shall accordingly stand modified. Suitable policy endorsements are being issued.