IFRS – Accounting implications for CFOs – Debt Modifications

The COVID-19 global pandemic has resulted in economic consequences that many reporting entities may not have had to previously consider. One of those consequences is the ability to repay loans.

In response, some lenders have agreed to changing the borrowing terms or providing waivers, or modifications to debt covenant arrangements. Any changes to the terms of loan agreements, for example providing any kind of payment holidays on either principal or interest or changing interest rates, should be carefully assessed.

The publication COVID-19 Accounting considerations for CFOs: Debt Modifications discusses the impact of these changes and the accounting of a debt modification, depending on whether or not a debt modification is substantial.

Download the publication below.