Media Advisory 10-28-20

FASB Staff Educational Paper Helps Stakeholders Apply Borrower’s Accounting for Debt Restructurings and Modifications


Educational document aimed at helping stakeholders apply debt restructuring and modification guidance during COVID-19 pandemic

Norwalk, CT—October 28, 2020—The Financial Accounting Standards Board (FASB) today announced the release of a FASB staff educational paper that provides stakeholders with a summary and overview of a debtor’s application of guidance on debt restructurings and modifications.

“Since the onset of the pandemic, many stakeholders have either had to apply guidance on debt restructurings or modifications for the first time or have had to do so more frequently,” stated FASB Technical Director Hillary Salo. “The FASB staff educational paper helps them navigate relevant guidance in these areas and serves as another resource to help stakeholders successfully navigate accounting standards during these difficult times.”

The FASB staff educational paper provides an overview of the accounting guidance for debt restructurings and modifications and provides examples of common restructurings and modifications. The FASB staff developed the educational paper based on requests from stakeholders, including the Private Company Council.  While the paper is a valuable educational resource, companies should consider the specific facts and circumstances of modifications to and restructurings of their debt arrangements to determine the appropriate accounting.

The FASB staff educational paper is available at at the COVID-19 web portal located on the FASB website.