Troubled Debt Flashcards
1
Q
What are the requirements for a restructuring to be considered a Troubled Debt Restructuring?
A
- Creditor granted a concession
- Debtor is in financial difficulty and will likely default without concession
2
Q
What do a settlement restructure and a modification of terms restructure each entail?
A
- Settlement: concession is acceptance of assets or equity w MV less than BV of debt
- Modification: concession is acceptance of revised debt terms where new PV is less than BV of debt
