bond discount

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Bond discount

The difference by which a bond's market price is lower than its face value. The antithesis of a bond premium, which prevails when the market price of a bond is higher than its face value. See: Original issue discount.

Bond Discount

A situation in which a bond's market value is lower than its face value. Short-term bonds are often issued at a bond discount, especially if they are zero-coupon bonds. However, bonds on the secondary market may trade at a bond discount, which occurs when supply exceeds demand. A bond discount is likely when the issuer has poor or recently downgraded credit, or when current interest rates are higher than the bond's. See also: Unamortized bond discount.

bond discount

References in periodicals archive ?
Furthermore, CAD adjusts N-Star CDO bond discounts to record such investments on an effective yield basis over the expected weighted average life of the investment.
The trustee correctly responds that Florida law does not specifically authorize the accretion of bond discounts and that the $90,000 redemption amount constitutes trust principal pursuant to [section]738.
Thus, the drafting attorney can provide the trustee with the authority to accrete bond discounts and to amortize bond premiums.
The amortization of bond premiums and bond discounts uses the interest method of allocation.
The question of whether to elect to amortize bond discounts should be evaluated on a taxpayer-by-taxpayer basis.
Note: Receipt of cash does not always represent all of the interest income to be reported for Federal and state income tax purposes; amortization of bond discount is also included.
Non-cash charges include accretion of bond discounts, depreciation and amortization and stock option expense.