Asked by Montonya Boozier on May 16, 2024
Verified
In a troubled debt restructuring that involves only a modification of terms, if the amount to be repaid is greater than the current carrying value of the liability
A) no gain or loss would be recognized by the debtor
B) an ordinary gain would be recognized by the debtor
C) a prior period adjustment would be recognized by the debtor
D) an ordinary loss would be recognized by the debtor
Modification Of Terms
Changes made to the terms of a contract, including loans and agreements, to adjust the obligations of the parties involved.
Carrying Value
The book value of an asset or liability on a company's balance sheet, calculated as original cost minus accumulated depreciation or amortization.
Ordinary Gain
A profit resulting from the sale or exchange of assets used in a business, not classified as capital gains.
- Comprehend the effects of debt restructuring on financial statements.
Verified Answer
Learning Objectives
- Comprehend the effects of debt restructuring on financial statements.
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