Assignment of claims

Assignment of claims is a legally regulated act whereby a creditor transfers his claim against a debtor to another person. This means that the assignee becomes a new creditor and assumes all rights relating to the claim in question. Assignment can be made on a variety of grounds, such as a contract for the sale of a claim, a donation or as security. In an accounting context, the assignment of a claim leads to the need to make appropriate bookings to reflect the change in the entity entitled to the sum of money in question.