Unamortized Bond Discount


DEFINITION of 'Unamortized Bond Discount'

An accounting methodology for certain bonds. The unamortized bond discount is the difference between the par of a bond - the value of the bond at maturity - and the proceeds from the sale of the bond by the issuing company, less the portion that has already been amortized on the profit and loss statement.

BREAKING DOWN 'Unamortized Bond Discount'

The discount refers to the difference in the cost to purchase a bond (its market price) and its par, or face value. The issuing company can choose to expense the entire amount of the discount, or can handle the discount as an asset to be amortized. Any amount that has yet to be expensed is referred to as the unamortized bond discount.

  1. Par

    Short for "par value," par can refer to bonds, preferred stock, ...
  2. Maturity

    The period of time for which a financial instrument remains outstanding. ...
  3. Bond

    A debt investment in which an investor loans money to an entity ...
  4. Amortization

    1. The paying off of debt in regular installments over a period ...
  5. Average Life

    The length of time the principal of a debt issue is expected ...
  6. Municipal Bond

    A debt security issued by a state, municipality or county to ...
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