The Financial Accounting Standards Board released 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,” Hillary Salo, technical director for the FASB, said. “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 also 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 an educational resource, companies should consider the specific facts and circumstances of modifications to and restructurings of their debt arrangements to determine the appropriate accounting.