Troubled Debt Restructurings


May 5, 2011
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Many financial institutions are finding it necessary to modify loan terms for the benefit of borrowers who are unable to make payments according to the original loan terms because they are experiencing financial difficulties. These are commonly referred to as troubled debt restructurings (TDRs). In April 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-02, A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring. This ASU helps clarify when a loan modification or restructuring is considered a TDR.

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