In the Summer 2012 issue of the FDIC's Supervisory Insights, the article "Accounting News: Troubled Debt Restructuring
" states, "Regulators support institutions proactively working with borrowers ...
16 letter to the Financial Accounting Standards Board (FASB) that a proposed rule for troubled debt restructurings
and in substance foreclosures should not be extended to commercial real estate loans and other forms of collateralized borrowings.
In accordance with ASC subtopic 470-60, Troubled Debt Restructuring
by Debtors, this debt for equity exchange was a troubled debt restructuring
and thus an extinguishment of the notes for which we recognized a net gain of $400.8 million.
* If a debtor does not otherwise have access to funds at a market rate for debt with similar risk characteristics as the restructured debt, the restructuring would be considered to be below a market rate and, therefore, should be considered a troubled debt restructuring
In such circumstances, an other-than-temporary impairment usually should be recognized prior to a troubled debt restructuring
EXHIBIT 1 Number of Filers Audited by Big Four Issuing APB Opinion 30 Extraordinary Items, 2005-2009 Type Gain on Troubled Debt Restructuring
3 Expropriation 3 Audit Opinion Unqualified 4 Going Concern 2 Impact Gain * 4 Loss 2 Total Occurrence 6 * For one expropriation, insurance proceeds exceeded the book value of assets lost.
The NCUA has announced new call reporting requirements for credit unions, codifying the recent troubled debt restructuring
regulations and helps the agency keep closer tabs on delinquent auto and business loans.
"If you have a troubled debt restructuring
, there's a lot of additional disclosure and a different impairment model that one needs to follow.
It is because of public comments changes were made to the reg flex and troubled debt restructuring
rules that resulted in rules better suited to the needs of credit unions.
In addition, two consensuses on the treatment of minority interests in certain real estate investment trusts (REITs) and accounting for the conversion of a loan into a debt security in a troubled debt restructuring
It applies to most types of loans, including collateralized and uncollateralized, as well as loans whose terms are modified in a troubled debt restructuring
. Excluded from the scope of the new standard are large groups of smaller-balance, homogeneous loans that are collectively evaluated for impairment, loans measured at fair value or at the lower of cost or fair value, leases, and certain investments in debt securities.