Accretion of Discount

Accretion of Discount

The increase in value of a security or other instrument as it approaches maturity. For example, suppose one buys a bond with a face value of $100 and pays $89. Because one is guaranteed to receive $100 when the bond matures, its value gradually increases between the purchase date and maturity. This increase is called the accretion of discount.
Mentioned in ?
References in periodicals archive ?
The year-over-year increase in net loss is due to increased exploration expenses, accretion of discount on senior note payable, and increased professional fees and interest expense, offset by decreased non-cash stock option expense, salaries and benefits expenses, and other general and administrative expenses.
Accretion of discount on asset retirement obligations is expected to be $3 million to $6 million.
For the three months ended March 31, 2015, preferred dividends on the Series B Preferred Stock and accretion of discount reduced net income attributable to common stockholders by USD214,000.
Net loss and comprehensive loss for the quarter was USD597,383, compared to USD981,600 for the previous-year quarter, including non-cash charges for interest and accretion of discount on convertible debentures in the amount of USD238,867 and USD171,319 respectively.
* The accretion of discount on issued debt, which directly impacts the gain or loss on its later extinguishment.
The final regulations provide guidance to holders and issuers of OID instruments as to when (and how much) income should be reported for accretion of discount or deducted as interest or amortized premium.
Excluding preferred stock dividends paid and accretion of discount on common stock warrants issued to the US Treasury, the company has reported a net income of USD1.2m for the fourth quarter of 2009 compared with a net loss of USD15.2m for the fourth quarter of 2008.
The decline in the net interest margin in the first quarter of 2016 compared with the fourth quarter of 2015 was largely attributable to a higher cost of funds in the first quarter of 2016 and a lower level of prepayment fees in the first quarter of 2016 on commercial real estate loans and commercial leases than were received during the fourth quarter of 2015, partially offset by an increased level of accretion of discounts on purchased loans in the first quarter of 2016.