accretion

noun
ac·cre·tion | \ə-ˈkrē-shən \

Definition of accretion 

1 : the process of growth or enlargement by a gradual buildup: such as

a : increase by external addition or accumulation (as by adhesion of external parts or particles)

b : the increase of land by the action of natural forces

2 : a product of accretion especially : an extraneous addition accretions of grime

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Other Words from accretion

accretionary \-shə-ˌner-ē, -ˌne-rē \ adjective
accretive \ə-ˈkrē-tiv \ adjective

Did You Know?

The slow accretion of scientific knowledge over many centuries has turned into an avalanche in our time. Any accretion of ice on a grounded jet will result in takeoff delays because of the danger it poses. The land area of the Mississippi Delta increases every year from the accretion of soil washed down the Mississippi River, though the accretions happen so slowly that it's difficult to detect any increase at all. Accretion is often used in scientific writing; its usual verb form, accrue, is more often used in financial contexts ("This figure doesn't count the accrued interest on the investments").

Examples of accretion in a Sentence

rocks formed by the slow accretion of limestone There was an accretion of ice on the car's windshield.

Recent Examples on the Web

One account of planet formation, called core accretion, holds that planets form slowly, coalescing around rocky cores, and in a region close to their stars. Joshua Sokol, WIRED, "These Spinning Disks of Gas and Dust Reveal How Planets Get Made," 28 May 2018 The global status quo is the accretion of every policy action—zillions of them—in the nearly 75 years since the end of World War II. Daniel Henninger, WSJ, "It’s Trump’s Iran Deal Now," 9 May 2018 An accretion of high-profile actress' graphic allegations of abuse and intimidation by film mogul Harvey Weinstein morphed into a powerful groundswell of demands that such behavior carry a price. Laura King, latimes.com, "Opening statements in Bill Cosby's retrial are scheduled to begin, but a dispute may cause a delay," 9 Apr. 2018 That event horizon will likely be surrounded by an accretion disc, a bright, incredibly energetic ring of matter that swirls around the black hole. Brian Resnick, Vox, "Most images of black holes are illustrations. Here’s what our telescopes actually capture.," 6 Apr. 2018 While much of the area escaped significant issues from ice, there are at least patchy zones of some heftier accretion. Ian Livingston, Washington Post, "PM Update: Rain ends but icy spots are a risk through Monday morning," 5 Feb. 2018 Sempra executives expect the transaction to become an immediate money-maker — an accretion of roughly 20 cents per share is anticipated in the first year. Rob Nikolewski, sandiegouniontribune.com, "Sempra officially wraps up $9.45 billion deal for Texas utility," 9 Mar. 2018 The analysts take a positive view on the deal’s cost and coordination benefits, as well as the expectation for double-digit accretion in 2019. Cristin Flanagan, Bloomberg.com, "Cigna’s $54 Billion Buy Seen as ‘Best Case’ for Drug Middleman," 8 Mar. 2018 The accretion of history is relentless, and endless. Hanya Yanagihara, New York Times, "T’s Design & Luxury Issue: Editor’s Letter," 22 Sep. 2017

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'accretion.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of accretion

1615, in the meaning defined at sense 1

History and Etymology for accretion

borrowed from Latin accrētiōn-, accrētiō "increase," from accrē- (stem of accrēscere "to increase, be added") + -tiōn-, -tiō, suffix of action nouns — more at accrue

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Time Traveler for accretion

The first known use of accretion was in 1615

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More Definitions for accretion

accretion

noun

Financial Definition of accretion

What It Is

Accretion is growth, typically in earnings, usually after an acquisition or other significant event. In the bond world, accretion refers to the capital gains earned on a bond purchased at a discount.

How It Works

Let's assume Company XYZ decides to buy Company ABC. Company XYZ's earnings per share before the acquisition are $0.15. Due to the acquisition, its earnings per share shoot up to $0.25, which makes the acquisition accretive to earnings by $0.10 per share.

In the bond world, let's assume that Jane Doe buys a 10-year bond issued by IBM. The bond has a face value of $1,000, but Jane buys it at a discount and pays $900. Over the next 10 years, Jane will see $100 of accretion on her bond ($1,000 - $900). Even though Jane doesn't actually receive the $100 until the bond matures, she must pay taxes on the accretion as it occurs over the 10 years.

Why It Matters

Accretion is a good thing for companies because it adds to the bottom line and thus increases shareholder value, which is the goal of every company. Of course, not all acquisitions turn out to be accretive, despite all the forecasts saying so. Accordingly, the manner in which an acquirer integrates a target into its operations, as well as the quality of the strategic fit between the two entities, are both key to ensuring that the expected gains materialize.

Any bond purchased at a discount accretes, and knowing to anticipate and calculate this accretion can make a big difference in an investor's tax situation.

Source: Investing Answers

accretive

adjective

Financial Definition of accretive

What It Is

To be accretive is to increase earnings per share.

How It Works

This term is most often used in the context of acquisitions. Let's assume Company XYZ has EPS of 25 cents this year. Next year, it acquires Company ABC. The cost of the acquisition in per share terms is 10 cents, but when Company XYZ combines the operations and profits of Company ABC in with its own, this adds 12 cents per share. Company XYZ comes out 2 cents per share ahead, meaning the acquisition is accretive to earnings.

Generally, an acquisition is accretive if the acquirer's price/earnings ratio is higher than the target's price/earnings ratio. Theoretically, the target in this case is a relative bargain for the acquirer.

Why It Matters

Accretion is a good thing for companies because it adds to the bottom line and thus increases shareholder value, which is the goal of every company. Of course, not all acquisitions turn out to be accretive, despite all the forecasts saying so. Accordingly, the manner in which an acquirer integrates a target into its operations is key to ensuring that the expected gains materialize.

Source: Investing Answers

accretion

noun

English Language Learners Definition of accretion

: a gradual process in which layers of a material are formed as small amounts are added over time

: something that has grown or accumulated slowly : a product or result of gradual growth

accretion

noun
ac·cre·tion | \ə-ˈkrē-shən \

Medical Definition of accretion 

: the process of growth or enlargement especially : increase by external addition or accumulation (as by adhesion of external parts or particles) — compare apposition sense 1, intussusception sense 2

Other Words from accretion

accretionary \-shə-ˌner-ē \ adjective

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accretion

noun
ac·cre·tion | \ə-ˈkrē-shən \

Legal Definition of accretion 

1 : the process or a result of growth or enlargement: as

a : the increase or extension of the boundaries of land or the consequent acquisition of land accruing to the owner by the gradual or imperceptible action of natural forces (as by the washing up of sand or soil from the sea or a river or by a gradual recession of the water from the usual watermark) also : accession in which the boundaries of land are enlarged by this process — compare avulsion, reliction

b : increase in the amount or extent of any kind of property or in the value of any property accretions to a trust fund resulting from the increase in value of…securities in which its corpus is investedIn re Estate of Gartenlaub, 244 P. 348 (1926)

Note: Accretion in value of the principal of a trust is generally not considered income.

c : enlargement of a bargaining unit by the addition of new employees

2 in the civil law of Louisiana : the passing to an heir or conjoint legatee of the right to accept a portion of a succession resulting from the failure of a coheir or colegatee to take his or her own share

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