Updated guide to accounting for debt modifications

Updated guide to accounting for debt modifications

June 5, 2023 | RSM US LLP

An updated edition of RSM’s Guide to accounting for debt modifications and restructurings is now available. The guide primarily focuses on sub-topics 470-50 and 470-60 of the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification Topic 470, Debt.

This edition reflects recent FASB amendments to the relevant accounting standards and enhancements to RSM’s interpretive guidance and illustrative examples. The following list highlights some of the more significant topics added, expanded upon or otherwise updated in the guide:

  • Considerations in determining the unit of account when there are multiple term loans with the same lender
  • Unit of account for Delayed Draw Term Loans (DDTLs) and accounting for related commitment fees and undrawn commitments
  • Changes to a prepayable DDTL
  • Percentage-based prepayment penalties and the potential impact on the 10% cash flow test
  • Accounting for preexisting unamortized deferred costs related to line-of-credit arrangements when the borrowing capacity does not change

A summary of all significant changes can be found in Appendix D of the guide.

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This article was written by RSM US LLP and originally appeared on 2023-06-05.
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