What it is
A loan amendment can look routine and still change the accounting. If the present value of the cash flows moves by the threshold, the old debt is extinguished and the new debt is recorded at fair value.
This program starts with a search for every change, tests management’s present value analysis against ASC 470-50-40-12, covers fees and costs, and finishes with covenant and classification work.
When to use it
- Entities that amended, refinanced or exchanged debt during the year.
- Loans with waivers, forbearance or covenant resets.
- Convertible debt where terms changed.
What’s inside
- Procedures to identify every amendment, waiver and exchange
- Tests of the present value calculation inputs, rate and look-back
- Fee, cost and gain or loss procedures
- Covenant, classification and disclosure procedures
Standard cited
This template follows ASC 470-50 / AU-C 330. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use. See AU-C 330 explained.
Questions
Is the ten percent test a calculator in this program?
No. The program tests management’s analysis. For a worked calculation use the companion Excel template.
What happens with a call or put feature?
ASC 470-50-40-12 requires separate cash flow analyses assuming exercise and non-exercise, with the smaller change used. The program has a procedure for that.
Related templates
- Audit Program: Debt and Equity
- Debt Classification and Covenant Memo (ASC 470)
- Debt Confirmation Letter (Lender Confirmation)
- Debt Modification Ten Percent Cash Flow Test (ASC 470-50)
Last updated 11/06/2026. All free templates.