DEFINITION of 'Abandonment'

1. The act of surrendering a claim to, or interest in, a particular asset.

2. The permitted withdrawal from a forward contract that is made for the purchase of deliverable securities.

3. The act of allowing an option to expire unexercised.

BREAKING DOWN 'Abandonment'

1. Corporations will generally abandon assets or projects that no longer offer any profitability. In most instances, proper legal documents must be filed with authorities and any damages must be recouped.

2. Abandonment occurs in forward contracts that permit the purchasers to withdraw from the contract, rather than purchase the deliverable securities.

3. In many instances, an option may not be worthwhile or profitable to exercise and, therefore, the purchaser of the option will let the option expire without being exercised.

  1. Forward Contract

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  3. Option

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  4. Exercise

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  6. Abandonment Value

    The value of a project or asset if it were immediately liquidated ...
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