Accretion

AAA

DEFINITION of 'Accretion'

1. Asset growth through addition or expansion.

2. In reference to discount bonds, it describes the accumulation of value until maturity.

INVESTOPEDIA EXPLAINS 'Accretion'

1. Accretion can occur through a company's internal development or by way of mergers and acquisitions.

2. Bonds at discount are sold below face value and mature at par. In the duration between the bond's issuance and maturity, no additional value is actually being accumulated within the bond but accretion occurs with the paper or implied capital gain.

RELATED TERMS
  1. Accretive Acquisition

    An acquisition that will increase the acquiring company's earnings ...
  2. Asset

    1. A resource with economic value that an individual, corporation ...
  3. Imputed Interest

    A term that describes interest that is considered to be paid ...
  4. Depreciation

    1. A method of allocating the cost of a tangible asset over its ...
  5. Dilutive Acquisition

    A takeover transaction that will decrease the acquirer's earnings ...
  6. Discount Bond

    A bond that is issued for less than its par (or face) value, ...
Related Articles
  1. Is Growth Always A Good Thing?
    Markets

    Is Growth Always A Good Thing?

  2. The Advantages Of Bonds
    Investing

    The Advantages Of Bonds

  3. How Bond Market Pricing Works
    Bonds & Fixed Income

    How Bond Market Pricing Works

  4. Taxation Rules For Bond Investors
    Taxes

    Taxation Rules For Bond Investors

comments powered by Disqus
Hot Definitions
  1. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  2. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  3. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  4. Budget Deficit

    A status of financial health in which expenditures exceed revenue. The term "budget deficit" is most commonly used to refer ...
  5. Floating Exchange Rate

    A country's exchange rate regime where its currency is set by the foreign-exchange market through supply and demand for that ...
  6. Underwriting

    1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments ...
Trading Center