# How is the carrying value of a bond calculated?

## How is the carrying value of a bond calculated?

The carrying value equals the face value of the bond plus the remaining premium to be amortized. Use the equation \$1,000 + \$64 = \$1,064. Calculate the carrying value of a bond sold at a discount using the same method. Subtract the unamortized discount from the face value.

## What is the carrying value of bonds at maturity?

“ The carrying value of bonds at maturity will always equal their par value. In other words, par value (nominal, principal, par or face amount), the amount on which the issuer pays interest, and which, most commonly, has to be repaid at the end of the term.

What is the carrying value formula?

For physical assets, such as machinery or computer hardware, carrying cost is calculated as (original cost – accumulated depreciation). If a company purchases a patent or some other intellectual property item, then the formula for carrying value is (original cost – amortization expense).

What is the difference between face value and carrying value?

Carrying value is the combined total of a bond’s face value and any unamortized discounts or premiums. Conversely, a premium on the face value of a bond occurs when the interest rate paid by a bond is higher than the market rate, so investors are willing to pay more than the face value.

### How can I calculate the carrying value of a bond?

or at a discount.

• Calculate the amortized portion of the discount or premium.
• Calculate the carrying value of a bond sold at premium.
• Calculate the carrying value of a bond sold at a discount using the same method.
• ### How do you calculate the price of a bond?

The average price of a bond is calculated by adding its face value to the price paid for it and dividing the sum by two. The average price is sometimes used in determining a bond’s yield to maturity where the average price replaces the purchase price in the yield to maturity calculation.

How do you calculate carrying value?

Calculating Carrying Value. The equation for calculating carrying value on most assets is simple. Take the original purchase cost. Add up the depreciation or amortization over the years you’ve held the asset and subtract the total from the purchase price. Then subtract any impairments on the value.

What is the carrying value of the bonds reported in?

Definition: The carrying value of a bond is the par value or face value of that bond plus any unamortized premiums or less any unamortized discounts. The net amount between the par value and the premium or discount is called the carrying value because it is reported on the balance sheet.