What does discounting mean?
Discounting is the present participle of the verb 'discount' and carries several related senses. Most broadly, it means dismissing or setting aside a claim, idea, or possibility as untrue, exaggerated, or unworthy of serious consideration, as when scientists discount anecdotal evidence. In commerce, it refers to selling goods at a reduced price, a practice central to retail promotions and seasonal sales. In finance, discounting has a precise technical meaning: calculating the present value of a future sum by applying a discount rate, a cornerstone of valuation methods such as discounted cash flow analysis. The word's connotations vary with context — skepticism in everyday speech, commercial urgency in retail, and analytical rigor in finance. Derived from the Latin 'computare' via Old French 'conter', it shares its roots with words like account and recount. Its versatility across casual, business, and financial registers makes it a valuable term for anyone discussing value, credibility, or price.
Present participle of discount: to dismiss as unlikely or unimportant; to sell at a reduced price; or (finance) to calculate the present value of a future sum.
"The committee was discounting evidence that did not fit its conclusions."
The action or practice of dismissing something, reducing prices, or applying a discount rate to future cash flows.
"Excessive discounting eroded the brand's premium image."
When banks 'discount' a future payment, they are literally shrinking tomorrow's money down to what it is worth today.
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Etymology of discounting
Discounting derives from the verb 'discount', formed from the prefix 'dis-' plus 'count', which entered English in the early 17th century from Old French 'descompter'. The underlying root is Latin 'computare', meaning to calculate or reckon, which also gave English words such as account, recount, and counter. The financial sense of deducting interest in advance came first, with the senses of price reduction and dismissal developing later.
Related word forms
How discounting is actually used
In everyday use, 'discounting' in the sense of dismissing often carries a skeptical tone, suggesting the person may be too quick to reject something. In finance and accounting it is a precise technical term with no negative connotation. The retail sense is common in commercial contexts and marketing language.
Easily confused with discounting
Discomforting means causing unease or distress, whereas discounting means dismissing something as unlikely or reducing its price or value.