Amortizable Bond Discount / Premium

Home » CMA Glossary Term » Financial Statements and Reporting » Amortizable Bond Discount / Premium

Amortizable Bond Discount/Premium refers to the process of systematically reducing the bond discount or premium over the life of the bond, aligning the bond’s book value with its face value at maturity. This process, known as bond discount amortization, impacts interest expense and financial statements, ensuring accurate reporting of a bond’s cost. The amortization can be executed using methods like the straight-line or effective interest rate method.

CMA Exam Academy 16-Week Accelerator Program