Notes to Financial Statements
Vanguard Short-Term Bond Index Fund is registered under the Investment Company Act of 1940 as an open-end
investment company, or mutual fund. Certain of the fund’s investments are in corporate debt instruments; the
issuers’ abilities to meet their obligations may be affected by economic developments in their respective
industries. The fund offers four classes of shares: Investor Shares, Admiral Shares, Signal Shares, and ETF
Shares. Investor Shares are available to any investor who meets the fund’s minimum purchase requirements.
Admiral Shares are designed for investors who meet certain administrative, service, tenure, and account-size
criteria. Signal Shares were first issued on March 30, 2007, and are designed for institutional investors who meet
certain administrative, service, and account-size criteria. ETF Shares were first issued on April 3, 2007, and first
offered to the public on April 10, 2007. ETF Shares are listed for trading on the American Stock Exchange; they
can be purchased and sold through a broker.
A. The following significant accounting policies conform to generally accepted accounting principles for U.S.
mutual funds. The fund consistently follows such policies in preparing its financial statements.
1. Security Valuation: Bonds, and temporary cash investments acquired over 60 days to maturity, are valued
using the latest bid prices or using valuations based on a matrix system (which considers such factors as
security prices, yields, maturities, and ratings), both as furnished by independent pricing services. Investments
in Vanguard Market Liquidity Fund are valued at that fund's net asset value. Other temporary cash investments
are valued at amortized cost, which approximates market value. Securities for which market quotations are not
readily available, or whose values have been materially affected by events occurring before the fund’s pricing
time but after the close of the securities’ primary markets, are valued by methods deemed by the board of