Accreted Value


DEFINITION of 'Accreted Value'

The value, at any given time, of a multi-year instrument that accrues interest but does not pay that interest until maturity. The most well-known applications include zero-coupon bonds or cumulative preferred stock.

BREAKING DOWN 'Accreted Value'

Accreted value may not have any relationship to market value. For example, a 10-year, 10% zero-coupon bond with a final maturity of $100 will have an accreted value of perhaps $43.60 in year two. If current market interest rates fall, the fair market value of that bond will be higher than its accreted value; if rates rise, the value of the bond will be less than its accreted value.

  1. Zero-Coupon Bond

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  2. Imputed Interest

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  3. Accretion

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  4. Accretive

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  5. Accretion of Discount

    The increase in the value of a discounted instrument as time ...
  6. Discount

    The condition of the price of a bond that is lower than par. ...
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