Accretion is a financial concept to represent an increase in value and can apply to either a transaction or a bond. For both, it refers to the fact that value is created purely on paper. In a transaction, accretion is the increase in Earnings Per Share after a merger or acquisition has taken place. If the Earnings Per Share increases, then the transaction is seen as being a good one. The opposite of accretion is dilution. For a bond, accretion is the increase in the bond price between time of trade and maturity. All bonds mature at par value (100) so if the bond were bought for 95, the accretion on the bond at maturity would be 5.
Free Resources
To continue learning and advancing your career, check out these additional helpful WSO resources:
or Want to Sign up with your social account?