Ch 14 Append. + IFRS Insights Flashcards Preview

Financial Acct Systems 2 > Ch 14 Append. + IFRS Insights > Flashcards

Flashcards in Ch 14 Append. + IFRS Insights Deck (10):

Troubled debt restructuring

Occurs when creditor grants a concession to debtor it
Wouldn't otherwise consider


IFRS generally assumes that all restructurings be accounted for as...

Extinguishments of debt


Troubled debt restructuring: involves 1 of 2 basic types of transactions, name both

1 settlement of debt at less than its carrying amount

2'continuation of debt with modification of terms


How should a creditor account for issuance of debtor's stock or transfer of noncash assets during a settlement of debt?

Should account for noncash assets and equity interest
received at fair value


Similarities IFRS + GAAP: liabilities

Similar, definitions, accounting and classified as current
And non current


IFRS VS GAAP: amortization of bond discounts or premiums

IFRS must use effective interest method

GAAP prefers effective interest method, but also permits
Straight line method


IFRS: net amounts

IFRS does not use bond premiums or discounts but
Shows bonds at their net amounts


GAAP VS IFRS: bond issue costs

GAAP: recorded as asset

IFRS: bond issue costs are netted against carrying amount
Of bonds


GAAP VS IFRS: restructuring terms

GAAP uses term troubled debt restructurings and has
Developed specific guidelines related to loan categories

IFRS assumes all restructurings will be accounted for as
Extinguishments of debt


IFRS VS GAAP: accounting for liability and expense when contract is onerous

IFRS: must be recognized under IFRS

GAAP: losses on onerous contracts generally not recognized
Unless addressed by industry or transaction specific