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Term Definition Discounting - the procedure used to convert periodic income and reversions into present value.
Application in Divorce Very often in a divorce, a little less cash in hand today is worth more than the promise of more money tomorrow.

Discounting is based on the assumption that benefits received in the future are worth less than the same benefits received now.

The term can be applied backward, which means taking a sum of money payable in the future and working back to today, and forward, which means taking today’s dollars and estimating what they will buy tomorrow.

Discounting can be used in negotiating a marital settlement.