Discounting
/ˈdɪskaʊntɪŋ/
Definitions
- (n.) The process of determining the present value of a future sum or stream of income by applying a discount rate.
The court relied on discounting to assess the damages payable today for future losses.
- (n.) The act of purchasing a negotiable instrument before its maturity at a price less than its face value, reflecting interest and risk.
The bank engaged in discounting the promissory note to provide immediate funds to the holder.
Related terms
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Commentary
In legal and financial contexts, discounting is crucial for valuation of future sums or instruments; clarity about the basis and rate of discounting is essential in contract drafting and litigation.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.