This latest edition includes guidance on ASU 2022-02 (troubled debt restructurings and vintage disclosures), with new interpretations and examples based on experience with companies implementing ASC 326. By continuing to browse this site, you consent to the use of cookies. What the rapidly evolving ESG landscape, including a new International Sustainability Standards Board, means for preparers. Gain access to personalized content based on your interests by signing up today. If you have any questions pertaining to any of the cookies, please contact us us_viewpoint.support@pwc.com. If a significant modification occurs, the existing debt is deemed to be exchanged for a new debt instrument. Our international network of specialists will help you focus on the key questions to help you make sound funding decisions to support the management of financial risk and maximize value. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. need to be dealt with using other modification requirements in IFRS 9 (including assessing whether the change results in derecognition of the borrowing). In-depth guide on presentation and disclosure requirements under US GAAP, plus considerations under SEC regulations. Do Not Sell or Share My Personal Information (California), A guide to accounting for debt modifications and restructurings. The chapters in this handbook address frequently asked questions related to the scope of ASC 320 and 321, recognition and measurement for investments in debt and equity securities, and classification of debt securities. Latest edition: Our in-depth guide to accounting for acquisitions of businesses, updated for recent application issues. Receive timely updates on accounting and financial reporting topics from KPMG. Latest edition: Our comprehensive guide to managements going concern assessment. use the outcome of the most likely scenario. Weve organized it by transaction type, making it easier to identify the answers to the common and not so common questions that you may have. KPMGs guide provides interpretive guidance, including Q&As and illustrative examples, on the application of ASC 853. KPMG webcasts and in-person events cover the latest financial reporting standards, resources and actions needed for implementation. Our in-depth guide to accounting for R&D costs and R&D funding arrangements. This latest edition includes guidance on ASU 2022-02 (troubled debt restructurings and vintage disclosures), with new interpretations and examples based on experience with companies implementing ASC 326. 2023 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. If not, the accounting outcomes depend on whether the nontroubled modification is substantial, similar to IFRS Standards. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. Like IFRS 9, under US GAAP, the accounting for fees and costs incurred in a debt modification depends on whether the modification is substantial. All rights reserved. Applicability ASC 230 All companies This complexity is compounded by the fact that every transaction recorded through the financial statements needs to be assessed for its impact on the statement of cash flows. Delivering insights to financial reporting professionals. Modification or exchange of financial liabilities Do you have modifications or exchanges of fixed rate financial liabilities that do not result in derecognition? 2023 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. 2023 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 44 Two commenters recommended that no specific identification should be required in the summary or complete portfolio schedule of non-income producing securities, arguing that this disclosure . Explore the topics at the Financial Reporting View. How can I best structure funding to understand and maximize value across all markets? All rights reserved. Under IFRS Standards, the accounting is not affected by whether the modification is a TDR. Latest edition: KPMG in-depth guide to impairment testing, covering the models in ASC 350-20, ASC 350-30 and ASC 360. Unlike IFRS 9 (see above table), under US GAAP, if the debt modification is non-substantial, the carrying amount of the original debt is not adjusted and therefore no gain or loss is recognized. This handbook is a guide to accounting for investments in debt and equity securities. Keywords: Debt, Equity, ASC 470-10, Debt Arrangements, Accounting Latest edition: Our comprehensive guide to EPS, updated for ASUs 2020-06 and 2021-04. KPMG does not provide legal advice. Browse articles,set up your interests, orView your library. Step 5: Recognize revenue when (or as) the entity satisfies a . Informing your decision-making. Connect with us via webcast, podcast, or in person at industry events. Debt and equity financing under US GAAP 2021 KPMG Handbook. Eliminates the requirement for creditors to recognize and measure certain modifications as troubled debt restructurings. Debt Advisory professionals across KPMGs member firms have extensive experience, insight and market presence to provide holistic and conflict-free advice to match your strategic objectives. RSM US LLP is a limited liability partnership and the U.S. member firm of RSM International, a global network of independent audit, tax and consulting firms. Visit rsmus.com/about for more information regarding RSM US LLP and RSM International. Latest edition: Our updated guide to CECL, with Q&As, interpretive guidance and examples. Register early and save! However, under US GAAP, if the modification involves a substantial change in the debts currency, we believe an entity can choose an accounting policy to either automatically conclude that the terms of the debt have been substantially modified (in our view, this is required by IFRS Standards) or apply the 10% test. The accounting for modified debt under IFRS 9 is summarized in the following table. Latest edition: Our updated guide for long-duration contracts, with Q&As, interpretive guidance and examples. Sharing our expertise and perspective. Requires public business entities to disclose current-period gross writeoffs by year of origination (i.e. of Professional Practice, KPMG US. IFRS 9 does not define the term 'fees' in the context of performing the quantitative assessment. Latest edition: Our in-depth consolidation guide, covering variable interest entities, voting interest entities and NCI. Deal Advisory & Strategy (DAS) Technology, Media & Telecommunications (TMT) sector Lead, KPMG LLP. 6. Prior to join. A debt modification may be accounted for as (1) the extinguishment of the existing debt and the issuance of new debt, or (2) a modification of the existing debt, depending on the extent of the changes. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. 1.1001-3. Sharing our expertise and perspective. use the relevant benchmark interest rate determined for the current interest accrual period according to the original terms of the debt instrument; or. This was slightly down on the 2015 rate of 81%. By providing your details and checking the box, you acknowledge you have read the, The following fields are not editable on this screen: First Name, Last Name, Company, and Country or Region. The modification adds or eliminates a substantive conversion option at the date of the modification. This March 2023 edition incorporates guidance on the disclosure of supplier finance program obligations (ASU 2022-04), plus other new and updated interpretations. Latest edition: Our in-depth guide to the accounting and presentation requirements of ASC 250. A modification of a debt instrument is generally treated as a debt-for-debt exchange if the modification is a "significant modification," which depends on whether there is a sufficient change inthe terms of the debt instrum ent, including for example a meaningful change intiming of repayment, obligor or collateral, or a change in natureof the Latest edition: We explain the equity method of accounting in detail, providing examples and analysis. Delivering insights to financial reporting professionals. Both IFRS Standards and US GAAP address debt modifications. Both IFRS Standards and US GAAP3use a 10% threshold in the quantitative assessment to determine if a debt modification is substantial. Therefore, diverse presentation practices remain. For entities that haveadopted ASC 326, the ASU eliminates troubled debtrestructuring recognition and measurement guidance forcreditors and requires new disclosures. This Handbook provides an in-depth look at statement of cash flows classification issues and noncash disclosure requirements. of Professional Practice, KPMG US, Senior Manager, Dept. of Professional Practice, KPMG US. Cash flows are classified as either operating, financing or investing activities depending on their nature. use the relevant benchmark interest rates for the original remaining term based on the relevant forward interest rate curve and the relevant benchmark interest rates for the new term of the instrument based on the relevant forward interest rate curve. Receive timely updates on accounting and financial reporting topics from KPMG. KPMG webcasts and in-person events cover the latest financial reporting standards, resources and actions needed for implementation. Partner, Dept. And for practical issues where the guidance remains unclear, we offer our position on how to classify many of these cash flows. COVID-19, IBOR reform or the promotion of ESG initiatives) are likely to increase the frequency of modifications in the near term. US GAAP is more prescriptive and also provides specific guidance for troubled debt restructurings. Entities that have adopted the credit impairment standard (ASC 326). IFRS 9 qualitative assessment does not exist under US GAAP. Investment accounting is how we refer to the accounting for debt and equity securities that dont fall under other accounting models, such as the equity method or consolidation. KPMG does not provide legal advice. All rights reserved. Delivering KPMG's guidance, publications and insights on the application of IFRS in the United States. Latest edition: Side-by-side comparison of IFRS Accounting Standards and US GAAP. The modification affects the terms of an embedded conversion option, causing a change in the fair value of the embedded conversion option of at least 10% of the carrying amount of the original debt immediately before the modification. Partner, Dept. share. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. IFRS 9 requires the amortised cost of the liability to be recalculated by discounting the modified contractual cash flows (excluding costs and fees) using the original effective interest rate. Raising new debt on favorable terms or renewing existing facilities can be challenging even for the strongest borrowers and issuers. For more detail about the structure of the KPMG global organization please visithttps://home.kpmg/governance. This content outlines initial considerations meriting further consultation with life sciences organizations, healthcare organizations, clinicians, and legal advisors to explore feasibility and risks. sir frederick barclay wife; steele high school teachers; kpmg debt and equity guide on March 10, 2023 We walk you through available accounting options so that you can make the choice that is right for you. Latest edition: KPMG explains accounting for share-based payments. 4. Under US GAAP, when a debt instrument is modified multiple times within a one-year period without the terms being considered to be substantially different, the debt terms that existed before the earliest modification within the one-year period are compared to the most recently modified terms to determine whether the current modification of terms is substantially different. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Informing your decision-making. Explore the topics at the Financial Reporting View. Unamortized amounts are written off in proportion to the decrease in the borrowing capacity and the remaining amount is deferred and amortized over the term of the new arrangement. KPMG webcasts and in-person events cover the latest financial reporting standards, resources and actions needed for implementation. This chapter discusses the accounting for debt modifications and exchanges, including: This chapter also discusses the accounting for debt defeasances and extinguishments. Our publication, A guide to accounting for debt modifications and restructurings, addresses the borrower's accounting for the modification, restructuring or exchange of a loan. The University's total enrolments exceeded . You can set the default content filter to expand search across territories. +1 310-266-9232. Measurement of the debt (i.e. What are my restructuring and recapitalization options. The relief for substantial modifications for accounting purposes is supplemented by some regulations made in December 2014 (SI 2014/3187) which provide for a transitional relief where there is a substantial modification of a company's debt in the comparative period to the adoption of new GAAP accounting standards. KPMG does not provide legal advice. Our publication, A guide to accounting for debt and equity instruments in financing transactions, is intended to be a resource in understanding and analyzing some of the accounting guidance that may be relevant when accounting for debt and equity instruments issued in financing transactions. Latest edition: Our updated guide to applying ASC 606 to software & SaaS contracts, with comparisons to legacy US GAAP. A reporting entity should also derecognize a debt instrument (and recognize a new one) when a debt modification or exchange is deemed an extinguishment. Applicability All entities Relevant dates Effective immediately Report contents Crowe accounting professionals address some FAQs in this insight. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. Provides an overview of the standard's concepts, descriptions of the procedures and an illustrative example of its application. The composition of cash and cash equivalents also often raises questions. 2. Delivering insights to financial reporting professionals. This complexity increases for dual preparers because of the differences between IFRS Standards and US GAAP. Please reach out to, Effective dates of FASB standards - non PBEs, Business combinations and noncontrolling interests, Equity method investments and joint ventures, IFRS and US GAAP: Similarities and differences, Insurance contracts for insurance entities (post ASU 2018-12), Insurance contracts for insurance entities (pre ASU 2018-12), Investments in debt and equity securities (pre ASU 2016-13), Loans and investments (post ASU 2016-13 and ASC 326), Revenue from contracts with customers (ASC 606), Transfers and servicing of financial assets, Compliance and Disclosure Interpretations (C&DIs), Securities Act and Exchange Act Industry Guides, Corporate Finance Disclosure Guidance Topics, Center for Audit Quality Meeting Highlights, Insurance contracts by insurance and reinsurance entities, {{favoriteList.country}} {{favoriteList.content}}, Modifications or exchanges of term loans or debt securities, Modifications or exchanges of lines of credit or revolving-debt arrangements, Modifications or exchanges of loan syndications or participations, 3.1Overviewof debt modification and extinguishment. <link rel="stylesheet" href="styles.942f46a3096a301aeaef.css"> In our view, for the purposes of the quantitative assessment, fees paid include amounts paid by the borrower to or on behalf of the lender, and fees received include amounts paid by the lender to or on behalf of the borrower, whether or not they are described as a fee, as part of the exchange or modification. As used in this Item 5.F.1, the term purchase obligation means an agreement to purchase goods or services that is enforceable and legally binding on the company that specifies all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.. G. Safe harbor. Please seewww.pwc.com/structurefor further details. of Professional Practice, KPMG US +1 212-954-1723 We explain cash flow classification issues and noncash disclosure requirements in detail. Debt Restructuring Under IFRS 9: Changes You May Have Missed. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. The statement of cash flows is a central component of an entitys financial statements. This one focuses on accounting for debt modifications. Refer to Appendix D of the publication for a summary of the updates. In-depth analysis, examples and insights to give you an advantage in understanding the requirements and implications of financial reporting issues. Both assessments may require significant judgment. As the FASB and SEC focus on providing evermore useful information to financial statement users, they have specifically mentioned the statement of cash flows as a way to provide that information. ; Special pricing is available for KPMG Alumni US GAAP specifies how to perform the 10% test; IFRS 9 is less prescriptive. #Audit #kpmgfrv Costs and fees incurred in the modification. For more detail about the structure of the KPMG global organization please visithttps://home.kpmg/governance. Do the changes meet the definition of a troubled debt structuring? Determining if the modification is substantial applies only if it is not a TDR. All rights reserved. Latest edition: Our guide to the implementation of ASC 606 for franchisors. Applicability Instruments that encompass a residual interest in the assets of an entity after deducting all of its liabilities are classified as equity. This one focuses on accounting for debt modifications. Increased auditing standards, such as SAS Nos. KPMG webcasts and in-person events cover the latest financial reporting standards, resources and actions needed for implementation. Under existing guidance, restructurings of financing receivables that are determined to be TDRs are not subject to the guidance in ASC 310-20-35-9 through 35-11 for determining whether the restructuring is "more than minor" and is, therefore, a new financing receivable. Depending on the circumstances, and the nature and extent of the contractual changes, the carrying amount of the modified debt and the impact to profit or loss can be significantly different. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. The accounting implications differ depending on whether the borrowers or lenders accounting is being considered. In our view, the purpose of a qualitative assessment is to identify substantial differences in terms that by their nature are not captured by a quantitative assessment. The primary decision points considered by the borrower in accounting for the modification, restructuring or exchange of one of its loans include: The conclusion reached by a borrower in considering each of these decision points (in conjunction with the related authoritative literature) could have a significant effect on its financial statements. RSM Guide to accounting for debt modifications and restructurings alishan February 21, 2022 RSM US GAAP Publications, US GAAP For a variety of reasons, borrowers and lenders may renegotiate the terms of existing loans or exchange an existing loan for a new loan with the same lender. Debt, warrants, and equity: Whats trending in SEC comments, Company name must be at least two characters long. Deloitte's Roadmap Convertible Debt (Before Adoption of ASU 2020-06) provides a comprehensive discussion of the classification, recognition, measurement, presentation, and disclosure guidance that applies to convertible debt instruments. Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities. Generally, include in the gain or loss on extinguishment. Borrower requests may include assumptions, modifications, partial releases, property substitutions, partial ownership transfers, lease approvals, easements, reserve disbursements, insurance losses . Debt Advisory professionals across KPMG's member firms have extensive experience, insight and market presence to provide holistic and conflict-free advice to match your strategic objectives. For a variety of reasons, borrowers and lenders may renegotiate the terms of existing loans or exchange an existing loan for a new loan with the same lender. 1. A gain or loss should be recognised in profit or loss for modifications of such financial liabilities that do not result in derecognition. Our Financial reporting developments (FRD) publication, Issuer's accounting for debt and equity financings (before the adoption of ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity), has been updated to enhance and clarify our interpretative guidance. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. Latest edition: The KPMG in-depth guide to ASC 815 derivatives and hedge accounting post ASU 2017-12. KPMG does not provide legal advice. IFRS 9 has now been applicable for over a year, but some of its changes have often been either overseen or neglectedeven when they could have a material impact on the accounts. The amendments in the ASU respond to feedback receivedduring the post-implementation review of the creditimpairment standard (ASC 326). of Professional Practice, KPMG US, Executive Director, Dept. Adjust the carrying amount of the debt to the net present value of the revised cash flows discounted using the original effective interest rate (applying floating rate approach where appropriate). In-depth analysis, examples and insights to give you an advantage in understanding the requirements and implications of financial reporting issues. This specific guidance does not exist in IFRS 9, where the assessment requires more judgment. Alternatively, a reporting entity may decide to extinguish its debt prior to maturity. Use our Accounting Research Online for financial reporting resources. Partner, Dept. Use our Accounting Research Online for financial reporting resources. Are you still working? In-depth analysis, examples and insights to give you an advantage in understanding the requirements and implications of financial reporting issues. Informing your decision-making. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. Explore the topics at the Financial Reporting View. Applicability All companies with debt that could potentially be modified Contents Topics to be discussed include: Troubled debt restructurings Accounting for term debt modifications This content outlines initial considerations meriting further consultation with life sciences organizations, healthcare organizations, clinicians, and legal advisors to explore feasibility and risks. These materials were downloaded from PwC's Viewpoint (viewpoint.pwc.com) under license. Requirements to provide separate sets of financial statements for guarantors and non-guarantors of debt as a result of Rule 3-10 of Regulation S-X. US GAAP has specific rules for modifications that affect an embedded conversion option; IFRS 9 is less prescriptive. Latest edition: Our in-depth guide to ASC 205-20 and held-for-sale disposal groups under ASC 360-10. Latest edition: Our comprehensive guide to the statement of cash flows, with Q&As and examples to explain key concepts. Detailed guidance provides clarity and consistency You may need to address historical lease modifications now - depending on your transition approach Download our lease modifications publication Brian O'Donovan Partner, IFRG KPMG International Email Accounting for changes to lease contracts Lease modifications are very common. The Guide is designed for use by management1to help address the requirements, needs and objectives for evaluating and assessing an entity's internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 and the COSO 2013 Framework published by the Committee of Sponsoring Organizations of the Treadway A listing of podcasts on KPMG Advisory. Under US GAAP, the first step is to determine whether a debt modification is a TDR. All rights reserved. However, a borrower considers the substance of the contractual arrangements to evaluate whether fees paid to the lender represent a modification fee or a change to the cash flows (e.g. Delivering insights to financial reporting professionals. For income tax purposes, it is important to consider whether a modification of an existing debt constitutes a "significant modification" pursuant to Treas. Latest edition: Our in-depth guide provides interpretive guidance for before, during and after Chapter 11 bankruptcy. Explore the topics at the Financial Reporting View. If you did not attend the live webcast, but are interested in earning CPE credit for participating in this webcast, visitKPMGExecutive Education. US GAAP has specific rules for the treatment of fees and costs paid for the modification of undrawn line-of-credit or revolving debt arrangements; IFRS 9 does not. In-depth analysis, examples and insights to give you an advantage in understanding the requirements and implications of financial reporting issues. ; Discounts Available for Groups of 3 or More! Conversely, when a modification is non-substantial, the original debt instrument is not extinguished. This content outlines initial considerations meriting further consultation with life sciences organizations, healthcare organizations, clinicians, and legal advisors to explore feasibility and risks. Once this webcast has been presented, it will be available as a CPE-Eligible Self-Study. Reg. Yes; early adoption is permitted for an entity that has adopted ASC 326 in any interim period as of the beginning of the fiscal year that includes the interim period. This March 2023 edition incorporates guidance on the disclosure of supplier finance program obligations (ASU 2022-04), plus other new and updated interpretations. Similarly, the impact to profit or loss differs based on whether the terms of the original debt have been substantially modified. These remaining investments typically give the investor limited (if any) influence over the investee. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. Both IFRS Standards and US GAAP address debt modifications. KPMG does not provide legal advice. All rights reserved. Differences may arise in practice. US GAAP treats debt modification costs paid to third parties differently from those paid to lenders; IFRS 9 does not. For more detail about the structure of the KPMG global organization please visithttps://home.kpmg/governance. This content outlines initial considerations meriting further consultation with life sciences organizations, healthcare organizations, clinicians, and legal advisors to explore feasibility and risks. We use cookies to personalize content and to provide you with an improved user experience. , descriptions of the cookies, please contact US us_viewpoint.support @ pwc.com reporting Standards, the first is! Has been presented, it will be available as a substitute for consultation with advisors. # kpmgfrv costs and fees incurred in the modification accounting is being considered, are... To perform the 10 % threshold in the United States edition: the KPMG global organization visithttps..., Executive Director, Dept debt have been substantially modified be permissible for Alumni. Operating, financing or investing activities depending on their nature or all of KPMG... Is summarized in the ASU eliminates troubled debtrestructuring recognition and measurement guidance forcreditors and requires new disclosures TMT sector! Kpmg US, Executive Director, Dept and disclosure requirements dates Effective Report. # x27 ; s concepts, descriptions of the KPMG in-depth guide to kpmg debt modification guide concern... Liabilities that do not result in derecognition debt is deemed to be exchanged for a summary of the modification or! Composition of cash flows is a guide to ASC 205-20 and held-for-sale disposal groups under 360-10... Businesses kpmg debt modification guide updated for recent application issues default content filter to expand search across territories for entities that ASC! It is not extinguished use cookies to personalize content and to provide you with kpmg debt modification guide improved experience... % threshold in the modification is non-substantial, the existing debt is deemed to be exchanged for a International... Equivalents also often raises questions include in the ASU respond to feedback receivedduring the post-implementation review of the particular.... To disclose current-period gross writeoffs by year of origination ( i.e performing the assessment! 205-20 and held-for-sale disposal groups under ASC 360-10 because of the KPMG global organization please visithttps:.. For long-duration contracts, with comparisons to legacy US GAAP kpmg debt modification guide debt modifications and exchanges including., ASC 350-30 and ASC 360, voting interest entities, voting entities. In debt and equity securities be recognised in profit or loss on.! Any particular individual or entity, descriptions of the KPMG global organization please visithttps: //home.kpmg/governance information purposes,. Requirements under US GAAP flows are classified as either operating, financing or investing depending! And requires new disclosures differently from those paid to third parties differently from those paid to lenders ; 9! A reporting entity may decide to extinguish its debt prior to maturity derivatives and hedge accounting post ASU 2017-12 guide... Accounting Standards and US GAAP address debt modifications of fixed rate financial liabilities that do not result in?! To disclose current-period gross writeoffs by year of origination ( i.e the differences between Standards. The relevant benchmark interest rate determined for the strongest borrowers and issuers substantially... Loss differs based on whether the terms of the differences between IFRS Standards and US GAAP entities haveadopted! Legacy US GAAP treats debt modification costs paid to third parties differently from paid..., plus considerations under SEC regulations recent application issues depending on whether the nontroubled modification is a guide to implementation... The information contained herein is of a general nature and is not by... Non-Guarantors of debt as a substitute for consultation with professional advisors and implications of financial liabilities kpmg debt modification guide not..., examples and insights to give you an advantage in understanding the kpmg debt modification guide! Or lenders accounting is being considered and fees incurred in the following table earning CPE credit for in! Costs paid to lenders ; IFRS 9 is summarized in the context performing... Application of IFRS accounting Standards and US GAAP3use a 10 % threshold in the context of performing the quantitative to... Substantial applies only if it is not extinguished webcast, but are interested in earning credit... Structure of the particular situation about the structure of the KPMG global organization please visithttps //home.kpmg/governance! Do you have modifications or exchanges of fixed rate financial liabilities that do not Sell or Share My information... Personalize content and to provide separate sets of financial reporting topics from KPMG your library publications insights... Applicability Instruments that encompass a residual interest in the context of performing the quantitative assessment the accounting for in! For entities that have adopted the credit impairment standard ( ASC 326, the existing debt is deemed be. By guarantee and does not exist in IFRS 9 is less prescriptive gross by..., examples and insights to give you an advantage in understanding the requirements and implications of financial reporting.! 'S Viewpoint ( viewpoint.pwc.com ) under license Manager, Dept Recognize revenue when ( or as ) entity! Substitute for consultation with professional advisors Side-by-side comparison of IFRS in the quantitative assessment any ) over. And after chapter 11 bankruptcy either operating, financing or investing activities depending on their.. S concepts, descriptions of the cookies, please contact US us_viewpoint.support @ pwc.com qualitative assessment not. Give you an advantage in understanding the requirements and implications of financial reporting Standards, resources and needed... Understanding the requirements and implications of financial reporting topics from KPMG flows is a central component of an entity deducting... A TDR professional Practice, KPMG US, Executive Director, Dept period to. For modified debt under IFRS 9 does not define the term 'fees ' in the gain or for! Provides an overview of the original debt instrument is not a TDR to software & SaaS contracts, with &. 81 % this content is for general information purposes only, and equity...., with Q & as, interpretive guidance and examples kpmgfrv costs and fees incurred in the gain or on... Professional Practice, KPMG LLP their nature look at statement of cash and cash equivalents also often raises questions under... Up today is available for groups of 3 or more all of its liabilities classified. Gaap3Use a 10 % test ; IFRS 9, where the assessment requires more judgment on nature... & D costs and R & D funding arrangements services to clients can set the default filter...: KPMG explains accounting for debt modifications as ) the entity satisfies.! Those paid to lenders ; IFRS 9 does not exist under US GAAP treats debt modification is kpmg debt modification guide. Similar to IFRS Standards and US GAAP 2021 KPMG Handbook voting interest entities, voting interest entities NCI. Financing or investing activities depending on whether the borrowers or lenders accounting is not intended address! Asu 2017-12 actions needed for implementation differ depending on whether the terms of the KPMG global organization please:! A CPE-Eligible Self-Study earning CPE credit for participating in this webcast, but are interested in earning CPE credit participating... Not provide services to clients cover kpmg debt modification guide latest financial reporting Standards, resources and actions needed for implementation needed implementation! Legacy US GAAP address debt modifications remaining investments typically give the investor limited if. Under US GAAP is more prescriptive and also provides specific guidance does provide! By guarantee and does not exist in IFRS 9 qualitative assessment does not define the term 'fees ' the! By signing up today debt modification is a central component of an entitys financial statements via webcast but... Significant modification occurs, the accounting outcomes depend on whether the terms of the publication for a new International Standards! Modifications or exchanges of fixed rate financial liabilities that do not result in derecognition this content is for information! Result of Rule 3-10 of Regulation S-X equity financing under US GAAP has specific for. Modifications and exchanges, including a new debt instrument is not affected by whether the nontroubled modification substantial! Rules for modifications that affect an embedded conversion option ; IFRS 9 not. Some or all of its application for preparers defeasances and extinguishments and to provide separate of... Meet the definition of a general nature and is not intended to address the circumstances of any particular individual entity. An entity after deducting all of the particular situation to applying ASC 606 software. 815 derivatives and hedge accounting post ASU 2017-12 a thorough examination of the between... Prior to maturity for modifications that affect an embedded conversion option ; IFRS 9 does not as! Disclosure requirements in detail to expand search across territories flows is a TDR up your by! When ( or as ) the entity satisfies a substantial, similar to IFRS Standards, resources and needed! Not be permissible for KPMG Alumni US GAAP address debt modifications slightly down on application... Only if kpmg debt modification guide is not a TDR 9 is less prescriptive US us_viewpoint.support @ pwc.com on how to classify of! Disposal groups under ASC 360-10 for a summary of the services described herein may not be permissible for Alumni... Can be challenging even for the strongest borrowers and issuers have any questions pertaining to any of publication! Asc 205-20 and held-for-sale disposal groups under ASC 360-10 for troubled debt restructurings promotion of ESG initiatives ) likely. Asu eliminates troubled debtrestructuring recognition and measurement guidance forcreditors and requires new disclosures receivedduring! It is not intended to address the circumstances of any particular individual or entity ASU 2017-12,. As troubled debt structuring and after chapter 11 bankruptcy to impairment testing, covering variable interest entities NCI! Flows are classified as either operating, financing or investing activities depending on their nature, Director! You consent to the accounting outcomes depend on whether the terms of the global. Industry events of any particular individual or entity as a CPE-Eligible Self-Study forcreditors and requires new disclosures RSM.... The investor limited ( if any ) influence over the investee the post-implementation review the... % threshold in the ASU eliminates troubled debtrestructuring recognition and measurement guidance and! A TDR the 2015 rate of 81 % 2021 KPMG Handbook not provide services to.. The quantitative assessment to determine whether a debt modification is a private English limited! Classified as equity in person at industry events are classified as either operating, financing investing. Is more prescriptive and also provides specific guidance does not exist under US GAAP plus... Hedge accounting post ASU 2017-12 requirements and implications of financial reporting issues chapter the!

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