Amortized Bond

A financial certificate that has been reduced in value for records on accounting statements. An amortized bond is one that is treated as an asset, with the discount amount being amortized to interest expense over the life of the bond. If a bond is issued at a discount - that is, offered for sale below its par (face value) - the discount must be treated either as an expense or it can be amortized as an asset.

Amortization is an accounting method that gradually and systematically reduces the cost value of a limited life, intangible asset. Treating a bond as an amortized asset is an accounting method in the handling of bonds. Amortizing allows bond issuers to treat the bond discount as an asset over the life of the bond (until the bond's maturity).


Investment dictionary. . 2012.

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  • bond discount — Sale of bonds on the market at a price less than the face amount of such. Claussen s, Inc. v. U. S., C.A.Ga., 469 F.2d 340, 345. From the standpoint of the issuer of a bond at the issue date, is the excess of the par value of a bond over its… …   Black's law dictionary

  • Amortizable Bond Premium — A tax term referring to the excess premium paid over and above the face value of a bond. Depending on the type of bond, the premium can be tax deductible and amortized over the life of the bond on a pro rata basis. A bond premium occurs when the… …   Investment dictionary

  • Unamortized Bond Premium — The difference between the par value or face value of a bond and the price above this face value, at which the bond has been issued. Unamortized bond premiums do not include any interest that has been amortized or written off. Also referred to as …   Investment dictionary

  • 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… …   Investment dictionary

  • Municipal bond — Financial markets Public market Exchange Securities Bond market Fixed income Corporate bond Government bond Municipal bond …   Wikipedia

  • unamortized bond discount — par value of a bond less the proceeds received from the sale of the bond, less whatever portion has been amortized. Bloomberg Financial Dictionary …   Financial and business terms

  • Weighted-Average Life — The Weighted Average Life (WAL) of an amortizing loan or amortizing bond, also called average life, [ [http://www.pimco.com/LeftNav/BondResources/Glossary/ PIMCO glossary] ] is the weighted average of the times of the principal repayments : it s… …   Wikipedia

  • mortgage — /morgaj/ A mortgage is an interest in land created by a written instrument providing security for the performance of a duty or the payment of a debt. At common law, an estate created by a conveyance absolute in its form, but intended to secure… …   Black's law dictionary

  • mortgage — /morgaj/ A mortgage is an interest in land created by a written instrument providing security for the performance of a duty or the payment of a debt. At common law, an estate created by a conveyance absolute in its form, but intended to secure… …   Black's law dictionary

  • Mortgage loan — Mortgage redirects here. For other uses, see Mortgage (disambiguation). Finance Financial markets …   Wikipedia


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