• Increasing discount refers to an increase in the value of a discount security as it approaches its maturity date.
  • This is the accounting process used to adjust the value of a financial instrument that has been purchased at a reduced rate.
  • Although a bond can be purchased at par, at a premium, or at a discount, its value is equal to par at maturity.
  • A bond bought at a discount will slowly rise in price until it reaches par value at maturity; this process is the accumulation of the discount.