Ch 14 Append. + IFRS Insights

Question 0

IFRS generally assumes that all restructurings be accounted for as…

Answer 0

Extinguishments of debt

Question 1

Troubled debt restructuring

Answer 1

Occurs when creditor grants a concession to debtor it

Wouldn’t otherwise consider

Question 2

Troubled debt restructuring: involves 1 of 2 basic types of transactions, name both

Answer 2

1 settlement of debt at less than its carrying amount

2’continuation of debt with modification of terms

Question 3

How should a creditor account for issuance of debtor’s stock or transfer of noncash assets during a settlement of debt?

Answer 3

Should account for noncash assets and equity interest

received at fair value

Question 4

Similarities IFRS + GAAP: liabilities

Answer 4

Similar, definitions, accounting and classified as current

And non current

Question 5

IFRS VS GAAP: amortization of bond discounts or premiums

Answer 5

IFRS must use effective interest method

GAAP prefers effective interest method, but also permits
Straight line method

Question 6

IFRS: net amounts

Answer 6

IFRS does not use bond premiums or discounts but

Shows bonds at their net amounts

Question 7

GAAP VS IFRS: bond issue costs

Answer 7

GAAP: recorded as asset

IFRS: bond issue costs are netted against carrying amount
Of bonds

Question 8

GAAP VS IFRS: restructuring terms

Answer 8

GAAP uses term troubled debt restructurings and has
Developed specific guidelines related to loan categories

IFRS assumes all restructurings will be accounted for as
Extinguishments of debt

Question 9

IFRS VS GAAP: accounting for liability and expense when contract is onerous

Answer 9

IFRS: must be recognized under IFRS

GAAP: losses on onerous contracts generally not recognized
Unless addressed by industry or transaction specific
requirements