Troubled Debt Restructuring
Last updated on April 7, 2011.
(Updated sections are indicated with an asterisk *)
The staff has prepared this summary of Board decisions for information purposes only. Those Board decisions are tentative and do not change current accounting. Official positions of the FASB are determined only after extensive due process and deliberations.
Project ObjectiveThe objective of this project is to develop guidance that will result in lending entities applying more consistent standards in determining whether a modification of a loan receivable constitutes a concession to a borrower that is experiencing financial difficulty—that is, the project will result in a more consistent identification of troubled debt restructurings.
*Due Process Documents
On April 5, 2011, the Board completed this project with the issuance of Accounting Standards Update No. 2011-02, Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring.
Decisions Reached at Last Meeting (February 3, 2011)
See minutes below.
Board/Other Public Meeting Dates
The Board meeting minutes are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final standard.
|February 23, 2011||Board Meeting—Insignificant Delays and Effective Dates|
|February 3, 2011||Board Meeting—Comment Letters and Topics for Redeliberation|
|August 25, 2010||Board Meeting—Clarifying Guidance on the Identification of Troubled Debt Restructurings, Transition Considerations|
|July 14, 2010||Board Meeting—Agenda Announcement|
Given the recent economic downturn, many lending institutions have seen an increase in the number of modifications to their loans receivable. For example, a loan might be modified to extend the term of the "interest-only" period or to defer or lower payments through the extension of the term over which a loan would otherwise be due. A number of constituents have raised concerns about whether additional guidance and/or clarity is needed to assist lenders in determining whether a modification of a loan to a borrower is a troubled debt restructuring. Currently, US GAAP specifies that a modification of a loan that represents concession to a borrower experiencing financial difficulty is a TDR.
On July 14, 2010, the FASB chairman announced his decision to add the Troubled Debt Restructuring project to the agenda.
Associate Practice Fellow
FASB Postgraduate Technical Assistant