Novation

AAA

DEFINITION of 'Novation'

1.The act of replacing one participating member of a contract with another.

2. The exchange of new debts or obligations for older existing ones.

INVESTOPEDIA EXPLAINS 'Novation'

1. All rights, duties, and terms are transferred to the new party upon consent of all parties affected.

2. A method used to extend the life of debt and obligations. Very similar to a rollover.

RELATED TERMS
  1. Debt

    An amount of money borrowed by one party from another. Many corporations/individuals ...
  2. Rollover

    A rollover is when you do the following: 1. Reinvest funds from ...
  3. Obligation

    The legal responsibility to meet the terms of a contract. If ...
  4. Financial Action Task Force (FATF)

    An intergovernmental organization that designs and promotes policies ...
  5. patent attorney

    A lawyer with expertise in intellectual property law as it pertains ...
  6. Patent Pending

    Wording inventors use to let the public know they've filed a ...
Related Articles
  1. Will Corporate Debt Drag Your Stock ...
    Investing Basics

    Will Corporate Debt Drag Your Stock ...

  2. Reading The Balance Sheet
    Investing Basics

    Reading The Balance Sheet

  3. How Bond Market Pricing Works
    Bonds & Fixed Income

    How Bond Market Pricing Works

  4. Advanced Bond Concepts
    Bonds & Fixed Income

    Advanced Bond Concepts

comments powered by Disqus
Hot Definitions
  1. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  2. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  3. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  4. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  5. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  6. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
Trading Center