DEFEASANCE Definition

Bookmark and Share

DEFEASANCE is a. the release of a debtor from the primary obligation for a debt. A legal defeasance could take place in absolute terms, i.e., the debt could cease to exist for anyone (by being forgiven or set aside), or the creditor could formally recognize that another party has taken over the primary obligation for the debt; and, b. in securities, a technique used by bond issuers to dis­charge old, low-rate debt by purchasing a smaller amount of higher-yielding U.S. Treasury debt. The Treasuries are held in trust to service the old debt being retired.

Learn new Accounting Terms

MONETARY ASSETS are measured at their collectible amounts, while nonmonetary assets are measured at historical costs.

RRA is Reserve Recognition Accounting.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.