Guidance on COVID-19 loan modifications and troubled debt restructurings

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) contained certain provisions offering relief from the requirements of certain generally accepted accounting principles in the United States (GAAP) for troubled debt restructurings (TDRs). Additionally, a group of banking agencies, in collaboration with the Financial Accounting Standards Board (FASB), issued a statement discussing practical expedients for evaluating whether loan modifications in response to COVID-19 are TDRs. The Interagency Statement, as revised, is important for lenders to understand because, under certain circumstances, it alleviates the burden of accounting for TDRs.

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