accretion (redirected from accretions)

Accretion

1. Asset growth through addition or expansion.

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

Notes:

1. Accretion can occur through a company's internal development or by way to 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.

See also: Accretive Acquisition, Asset, Depreciation, Dilutive Acquisition, Discount Bond, Imputed Interest

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See Accretion (of a discount.

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accretion

The accumulation of capital gains on discount bonds with the expectation that the securities will be redeemed at maturity. Excluding municipals, the amount of annual accretion is taxable on an original-issue discount bond even though only a small amount of interest or no interest at all is paid each year. See also imputed interest.