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ASC 470-50-40-10 and ASC 470-50-40-11 provide guidance on whether a modification or exchange of a term loan or debt security should be accounted for as a modification or an extinguishment. ASC 470-50-40-10
- 3.7 Debt extinguishment accounting - Viewpoint
ASC 405-20-40-1 provides guidance on when a reporting entity...
- Topic 470 (Debt): Borrower’s Accounting for Debt Modifications
On October 1, 20X3, Borrower D and Bank X modify the term...
- 3.7 Debt extinguishment accounting - Viewpoint
28 paź 2020 · On October 1, 20X3, Borrower D and Bank X modify the term loan to extend the maturity to September 30, 20X4. The loan will retain the 5 percent annual interest rate, but all interest payments will be deferred to the maturity date instead of paid quarterly.
Borrowers may seek to renegotiate the terms of existing loans because they are not able to meet current loan covenants or cash flow requirements under their loans, or because they want to increase the amount borrowed or obtain lower interest rates. Lenders may be willing to renegotiate the terms of existing loans
Our comprehensive Guide to accounting for debt modifications and restructurings addresses the borrower’s accounting for the modification, restructuring or exchange of a loan under Topic 470, Debt, of the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification.
ASC 310-20-35-9 discusses the conditions for when a creditor should account for a modification of the terms of an existing debt instrument as a modification or as an extinguishment of the original debt instrument.
31 mar 2022 · In addition to the elimination of TDR guidance, an entity that has adopted ASU 2022-02 no longer considers renewals, modifications, and extensions that result from reasonably expected TDRs in their calculation of the allowance for credit losses in accordance with ASC 326-20.
1 kwi 2022 · The guidance requires a creditor to apply the loan refinancing and restructuring guidance in ASC 310-205 (consistent with the accounting for other loan modifications) to determine whether a modification results in a new loan or a continuation of an existing loan.
