Unamortized Bond Discount

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Amortization

    1. The paying off of debt in regular installments over a period ...
  2. Par

    1. The face value of a bond. Generally $1,000 for corporate issues, ...
  3. Average Life

    The length of time the principal of a debt issue is expected ...
  4. Maturity

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

    A debt investment in which an investor loans money to an entity ...
  6. Municipal Bond

    A debt security issued by a state, municipality or county to ...
Related Articles
  1. Basics Of Federal Bond Issues
    Bonds & Fixed Income

    Basics Of Federal Bond Issues

  2. The Advantages Of Bonds
    Investing

    The Advantages Of Bonds

  3. Corporate Bonds: An Introduction To ...
    Bonds & Fixed Income

    Corporate Bonds: An Introduction To ...

  4. Asset Allocation In A Bond Portfolio
    Bonds & Fixed Income

    Asset Allocation In A Bond Portfolio

comments powered by Disqus
Hot Definitions
  1. Last In, First Out - LIFO

    An asset-management and valuation method that assumes that assets produced or acquired last are the ones that are used, sold ...
  2. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  3. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  4. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  5. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  6. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
Trading Center