Troubled Debt Restructuring Flashcards
1
Q
What are the different types of troubled debt restructuring?
A
Transfer of assets, equity interest, and modification of terms
2
Q
How is ordinary gain/loss recognized in a transfer of asset?
A
FV of asset transferred - NBV asset transferred
3
Q
How is extraordinary gain recognized in the transfer of asset?
A
Carrying amount of the payable - FV asset transferred
4
Q
How is extraordinary gain recognized in the transfer of equity interest?
A
Carrying amount of the payable - FV equity transferred
5
Q
The debtor usually accounts for the effects of the restructuring?
A
Prospectively
6
Q
What should a debtor do when the total future cash payments are less than the carrying amount?
A
Reduce the carrying amount and recognize the difference as a gain
