a term used to describe adjustments made to general business reserves so that they reflect the present value of the future contingent liabilities; such an adjustment may be made for accounting purposes, and may in certain circumstances be required for tax purposes where the reserves are initially calculated by reference to the likely ultimate cost of settlement after taking into account monetary inflation, and also the tendency for court awards for damages to increase by more than the rate of inflation; the adjustment is usually made by discounting the ultimate cost of settlement by reference to a suitable rate of interest, thus reflecting the time value of money.