What is Disposition?
Disposition refers to disposing of an asset through sale, assignment, or other transfer method.
How Does Disposition Work?
When an investor sells stock or bonds in a particular company, the sale is referred to as a disposition of the stock or bonds. Insider trades are reported by a company as the disposition of shares to board members and executives. When a bank reviews its loans and decides to sell the collateral that has been taken in a foreclosure, it is referred to as a disposition of the loan assets.
Why Does Disposition Matter?
Disposition indicates a transfer of ownership of the asset. The asset is sold or relinquished. Disposition can also describe an asset held as collateral on a loan.
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