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. Imputed Interest

    A term that describes interest that is considered to be paid ...
  2. Accretion

    1. Asset growth through addition or expansion. 2. In reference ...
  3. Zero-Coupon Bond

    A debt security that doesn't pay interest (a coupon) but is traded ...
  4. Accretive

    The process of accretion, which is the growth or increase by ...
  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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