accretion of discount

Definition

An accounting procedure which adjusts the value of a bond purchased at a discount, such as a zero-coupon bond. The accretion of discount procedure adjusts the book value of the bond to the par value of the bond at maturity. It takes into account the interest paid out for the bond, which is accrued as non-cash payments during the life of the bond and only paid out at maturity.

Related Terms

Browse by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
accretion Original Issue Discount