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Troubled Debt Restructuring Calculator for the Debtor (ASC 470-60)

What do these figures come to once the work is shown?

Gain when future cash payments under modified terms are below the carrying amount, or the new effective rate when they are not.

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Your figures
Example figuresIllustrative only. Type over them with your own.
Gain on restructuring
$154,000
Carrying amount over undiscounted future payments
Total future cash payments under new terms
$896,000
New carrying amount
$896,000
Drawn to one scale
Gain on restructuring$154,000
Total future cash payments under new terms$896,000
New carrying amount$896,000
All results
MeasureResult
Gain on restructuring$154,000
Total future cash payments under new terms$896,000
New carrying amount$896,000
Effective rate for interest after restructuring
All future payments reduce the carrying amount
0.00%
How this was worked out
Work shownrecomputed as you type
Future payments = new principal + new interest over the term (undiscounted)
Gain = carrying amount - future payments, if positive
No gain: new effective rate equates PV of future payments to carrying amount

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Future payments = new principal + new interest over the term (undiscounted)
  • Gain = carrying amount - future payments, if positive
  • No gain: new effective rate equates PV of future payments to carrying amount

How it works

ASC 470-60 governs the debtor's side of a troubled debt restructuring. When only the terms are modified, the debtor compares the carrying amount with the total undiscounted future cash payments under the new terms. If the payments are less, the debtor reduces the carrying amount to the payments, recognizes a gain, and recognizes no interest expense afterward. If not, there is no gain and interest is recognized prospectively at the rate that equates the payments to the carrying amount.

ASU 2022-02 removed TDR accounting for creditors that have adopted ASC 326. ASC 470-60 for debtors was not removed.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

What makes a restructuring troubled?

ASC 470-60 asks whether the debtor is experiencing financial difficulty and the creditor grants a concession it would not otherwise consider.

What if assets or equity settle the debt?

The debtor measures the gain against the fair value of what is transferred. This tool covers modification of terms only.

Are contingent payments included?

They are included in future payments to the extent needed to avoid recognizing a gain that might be reversed.

Sources

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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