The difference between the amortized cost basis of a debt security and the present value of expected cash flows for that security discounted at the effective interest rate implicit in the debt instrument when it was originally acquired is called the

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The difference described is known as the amount representing the credit loss. This concept is used in accounting to recognize when the expected cash flows from a debt security, discounted at the original effective interest rate, are less than the amortized cost basis, indicating a loss due to credit deterioration.

The Difference Between the Amortized Cost Basis of a Debt