An original issue discount is created when debt is offered at a discount. Now, when does this happen? Well, it happens on debt with low or no interest. So if you imagine a zero coupon bond, where is the investor getting their return from? There's no interest, there's no coupon. So instead they might buy the debt at 90, and then at maturity, redeem it for 100, and their return would be that 10 capital appreciation. Now, the same thing, an original issue discount, can be used to account for debt issuance fees. How does this work? Well, fees are paid in cash. So if a bank or financial institution has helped you issue some debt, you pay them, they get their fees immediately, they can walk away happy. But for me, as the person who's issued the debt, I can capitalize those fees and amortize them over time. So let's say we issued debt with a life of five years, that means I get to enjoy the benefit of that debt for five years, I might pay interest on that debt for five years and I also get to spread the fees over five years worth of income statements. What's the accounting, what it's accounted for as a negative liability. Now, often it's netted off against the debt and the balance sheet, which means it looks like it reduces the debt balance and the balance sheet. However, the unamortized fees or original issue discount can be used as a separate line item on the balance sheet, but typically it's very small so it's typically just netted off against the debt. Then, it's amortized over the life of the debts, and the debt balance gradually increases to the principle amount. That's assuming that the original issue discount is being netted off against the debts. So let's have a look at an example here. We've got a balance sheet, and we've got the deal date, and then we've got deal date plus one and two. We can see that at the deal date, we had an ending unamortized liability of 10. That is your original issue discount, or the unamortized debt issuance fees. Then at the beginning of deal date plus one, you still got that same 10. But in that following year, you then amortized two of its away, and that negative liability gradually reduces from 10 to eight, and then from eight to six. The amortization is then included within your finance costs on the income statement, i.e., it's a part of your interest. So on the income statement, at deal date, nothing happens, but deal date plus one, your first income statement after the deal date, you would include amortization of two within your finance costs.