Present Value - Debt Restructure

Question 1

Debtor records a gain

Answer 1

debtor records a gain at the date of a restructure involving only a modification of terms when the prerestructure carrying amount exceeds the total future cash flows per the modification. The gain recognized is the difference between the prerestructure carrying amount and the future cash flows.

Question 2

Non cash asset exchanged to settle debt

Answer 2

When a noncash asset is exchanged to settle debt, it must be revalued to fair value with a gain or loss recognized on the asset.

Question 3

Modification of Debt - IFRS

Answer 3

or an exchange of an original liability with a new financial liability with substantially different terms, are accounted for as an extinguishment of the original liability and the recognition of a new financial liability.