ASU 2016-05

The term novation, as it relates to derivative instruments, refers to replacing one
of the parties to a derivative instrument with a new party. In practice, derivative
instrument novations may occur for a variety of reasons, including (but not limited
to) financial institution mergers, intercompany transactions, an entity exiting a
particular derivatives business or relationship, an entity managing against internal
credit limits, or in response to laws or regulatory requirements.