USA
The discount from the face value of a bond or other debt instrument at the time that it is issued. It is the difference between the stated redemption price at maturity and the offering price. This discount is amortized over the life of the bond and is treated as a form of taxable interest, which gets reported as it accrues, whether or not the issuer makes any taxable interest payments.
An original issue discount bond is a bond issued at a price below par. The most extreme example of an OID bond is a zero coupon bond (zero coupon bonds).
Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010.