ASC

ASC 310-40

Troubled Debt Restructurings by Creditors

310 Receivables

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In brief

IntermediateFinancial instrumentsImpairmentDisclosureTransition and effective dates

ASC 310-40 formerly contained the creditor's accounting for troubled debt restructurings (TDRs) — the definition of a TDR, measurement of impairment on restructured loans, accounting for assets or equity interests received in satisfaction of a receivable, and TDR-specific disclosures. Every operative paragraph has been superseded, principally by ASU 2022-02 (which eliminated the TDR model for creditors that have adopted ASC 326), with earlier deletions by ASU 2016-13 and ASU 2014-09. The subtopic is now an empty shell: creditors account for modifications to borrowers experiencing financial difficulty under ASC 326 and ASC 310-10 instead.

Key points (6)
  • All recognition, measurement, derecognition, and disclosure paragraphs in 310-40 (Sections 05, 10, 15, 25, 30, 35, 40, 50, and 55) are marked 'superseded,' so the subtopic imposes no current requirements.
  • ASU 2022-02 eliminated the TDR accounting model for creditors and superseded the bulk of 310-40, including 310-40-15-1 through 15-20 (scope), 310-40-25-1 and 25-2 (recognition), 310-40-30-1 (initial measurement), 310-40-35-1 through 35-12, and 310-40-50-1 and 50-1A (disclosure).
  • ASU 2016-13 (CECL) had already superseded the impairment-measurement paragraphs 310-40-35-8 and 35-9 and disclosure paragraphs 310-40-50-2 through 50-4 and 50-6.
  • ASU 2014-09 (Revenue from Contracts with Customers) superseded 310-40-40-6A and 40-7 and the related implementation guidance at 310-40-55-11 and 55-12 on assets received in satisfaction of a receivable.
  • The transition paragraphs in Section 65 (310-40-65-1, 65-2, and 65-3), tied to ASUs 2011-02, 2014-04, and 2014-14, were themselves superseded after their transition periods ended in 2013 and 2017.
  • Creditors now evaluate modifications to receivables from borrowers experiencing financial difficulty under Topic 326 (expected credit losses), with enhanced modification and vintage disclosures, rather than under a separate TDR framework.

For students. Know that creditor TDR accounting is dead law after ASU 2022-02 — citing 310-40 for a live rule is the classic mistake, though older textbooks and exam questions still reference it. Modifications to loans of borrowers in financial difficulty now run through the CECL allowance in Topic 326 plus the new modification and vintage disclosures.

troubled debt restructuringsuperseded guidanceloan modificationborrower experiencing financial difficultycurrent expected credit lossescreditor accountingconcessionforeclosure

Machine-generated study aid for ASC 310-40. Check the source paragraphs below.

310-40-00Status

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310-40-00-1
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Amortized Cost BasisSupersededAccounting Standards Update No. 2022-0203/31/2022
Amortized Cost BasisAddedAccounting Standards Update No. 2016-1306/16/2016
Carrying AmountSupersededAccounting Standards Update No. 2022-0203/31/2022
ContractSupersededAccounting Standards Update No. 2022-0203/31/2022
ContractAddedAccounting Standards Update No. 2016-0202/25/2016
DebtSupersededAccounting Standards Update No. 2016-1912/14/2016
Effective Interest RateSupersededAccounting Standards Update No. 2022-0203/31/2022
Effective Interest RateAmendedAccounting Standards Update No. 2016-1912/14/2016
Effective Interest RateAmendedAccounting Standards Update No. 2016-1306/16/2016
Fair Value (2nd def.)SupersededAccounting Standards Update No. 2022-0203/31/2022
Financial AssetSupersededAccounting Standards Update No. 2022-0203/31/2022
Financial Asset (1st def.)SupersededAccounting Standards Update No. 2016-1912/14/2016
Financial Asset (1st def.)AddedAccounting Standards Update No. 2016-1306/16/2016
Financial Asset (2nd def.)AddedAccounting Standards Update No. 2016-1912/14/2016
Financing ReceivableSupersededAccounting Standards Update No. 2022-0203/31/2022
Financing ReceivableAddedAccounting Standards Update No. 2010-2007/21/2010
LeaseSupersededAccounting Standards Update No. 2022-0203/31/2022
LeaseAddedAccounting Standards Update No. 2016-0202/25/2016
Lease ModificationSupersededAccounting Standards Update No. 2022-0203/31/2022
Lease ModificationAddedAccounting Standards Update No. 2016-0202/25/2016
Market ParticipantsSupersededAccounting Standards Update No. 2022-0203/31/2022
Not-for-Profit EntitySupersededAccounting Standards Update No. 2022-0203/31/2022
Not-for-Profit EntityAddedAccounting Standards Update No. 2014-0401/17/2014
Orderly TransactionSupersededAccounting Standards Update No. 2022-0203/31/2022
Probable (2nd def.)SupersededAccounting Standards Update No. 2022-0203/31/2022
ProbableSupersededAccounting Standards Update No. 2016-1306/16/2016
Public Business EntitySupersededAccounting Standards Update No. 2022-0203/31/2022
Public Business EntityAmendedMaintenance Update 2017-06 (PDF)04/07/2017
Public Business EntityAmendedMaintenance Update 2016-11 (PDF)06/27/2016
Public Business EntityAddedAccounting Standards Update No. 2014-0401/17/2014
Purchased Financial Assets with Credit DeteriorationSupersededAccounting Standards Update No. 2022-0203/31/2022
Purchased Financial Assets with Credit DeteriorationAmendedAccounting Standards Update No. 2016-1912/14/2016
Purchased Financial Assets with Credit DeteriorationAddedAccounting Standards Update No. 2016-1306/16/2016
Recorded InvestmentSupersededAccounting Standards Update No. 2022-0203/31/2022
Recorded InvestmentAmendedAccounting Standards Update No. 2015-1006/12/2015
Recorded Investment in the ReceivableSupersededAccounting Standards Update No. 2016-1306/16/2016
Related PartiesSupersededAccounting Standards Update No. 2022-0203/31/2022
Security (2nd def.)SupersededAccounting Standards Update No. 2022-0203/31/2022
Time of RestructuringSupersededAccounting Standards Update No. 2022-0203/31/2022
Troubled Debt RestructuringSupersededAccounting Standards Update No. 2022-0203/31/2022
310-40-05-1SupersededAccounting Standards Update No. 2022-0203/31/2022
310-40-10-1SupersededAccounting Standards Update No. 2022-0203/31/2022
310-40-10-1AmendedAccounting Standards Update No. 2016-1912/14/2016
310-40-10-2SupersededAccounting Standards Update No. 2022-0203/31/2022
310-40-15-1 through 15-20
SupersededAccounting Standards Update No. 2022-0203/31/2022
310-40-15-4AAddedAccounting Standards Update No. 2016-1912/14/2016
310-40-15-8AAddedAccounting Standards Update No. 2011-0204/05/2011
310-40-15-9AmendedAccounting Standards Update No. 2016-1912/14/2016
310-40-15-11AmendedAccounting Standards Update No. 2016-1306/16/2016
310-40-15-11AmendedAccounting Standards Update No. 2016-0202/25/2016
310-40-15-11AmendedAccounting Standards Update No. 2010-1804/29/2010
310-40-15-12AmendedAccounting Standards Update No. 2016-1306/16/2016
310-40-15-13 through 15-20
AddedAccounting Standards Update No. 2011-0204/05/2011
310-40-25-1SupersededAccounting Standards Update No. 2022-0203/31/2022
310-40-25-2SupersededAccounting Standards Update No. 2022-0203/31/2022
310-40-25-2AmendedAccounting Standards Update No. 2016-1912/14/2016
310-40-25-2AmendedAccounting Standards Update No. 2015-0202/18/2015
310-40-30-1SupersededAccounting Standards Update No. 2022-0203/31/2022
310-40-35-1 through 35-12
SupersededAccounting Standards Update No. 2022-0203/31/2022
310-40-35-2AmendedAccounting Standards Update No. 2016-1912/14/2016
310-40-35-2AmendedAccounting Standards Update No. 2012-0410/01/2012
310-40-35-6AmendedAccounting Standards Update No. 2012-0410/01/2012
310-40-35-7AmendedAccounting Standards Update No. 2016-1306/16/2016
310-40-35-8SupersededAccounting Standards Update No. 2016-1306/16/2016
310-40-35-9SupersededAccounting Standards Update No. 2016-1306/16/2016
310-40-35-10 through 35-12
AmendedAccounting Standards Update No. 2016-1306/16/2016
310-40-40-1 through 40-10
SupersededAccounting Standards Update No. 2022-0203/31/2022
310-40-40-1AmendedAccounting Standards Update No. 2016-1912/14/2016
310-40-40-3AmendedAccounting Standards Update No. 2016-1306/16/2016
310-40-40-6AmendedAccounting Standards Update No. 2014-1408/08/2014
310-40-40-6AmendedAccounting Standards Update No. 2014-0905/28/2014
310-40-40-6AmendedAccounting Standards Update No. 2014-0401/17/2014
310-40-40-6ASupersededAccounting Standards Update No. 2014-0905/28/2014
310-40-40-7SupersededAccounting Standards Update No. 2014-0905/28/2014
310-40-40-7AAddedAccounting Standards Update No. 2014-1408/08/2014
310-40-40-7BAddedAccounting Standards Update No. 2014-1408/08/2014
310-40-50-1 through 50-7
SupersededAccounting Standards Update No. 2022-0203/31/2022
310-40-50-1AAddedAccounting Standards Update No. 2010-2007/21/2010
310-40-50-2 through 50-4
SupersededAccounting Standards Update No. 2016-1306/16/2016
310-40-50-5AmendedAccounting Standards Update No. 2016-1306/16/2016
310-40-50-5AmendedAccounting Standards Update No. 2010-2007/21/2010
310-40-50-6SupersededAccounting Standards Update No. 2016-1306/16/2016
310-40-50-6AmendedAccounting Standards Update No. 2010-2007/21/2010
310-40-55-1 through 55-25
SupersededAccounting Standards Update No. 2022-0203/31/2022
310-40-55-1AmendedAccounting Standards Update No. 2016-1912/14/2016
310-40-55-1AmendedAccounting Standards Update No. 2014-0401/17/2014
310-40-55-7AmendedAccounting Standards Update No. 2016-1306/16/2016
310-40-55-9AmendedAccounting Standards Update No. 2009-1612/23/2009
310-40-55-10AmendedAccounting Standards Update No. 2009-1612/23/2009
310-40-55-10AAddedAccounting Standards Update No. 2014-0401/17/2014
310-40-55-11SupersededAccounting Standards Update No. 2014-0905/28/2014
310-40-55-12SupersededAccounting Standards Update No. 2014-0905/28/2014
310-40-55-13 through 55-15
AmendedAccounting Standards Update No. 2016-1306/16/2016
310-40-55-14AmendedAccounting Standards Update No. 2019-0404/25/2019
310-40-55-16 through 55-25
AddedAccounting Standards Update No. 2011-0204/05/2011
310-40-65-1AddedAccounting Standards Update No. 2011-0204/05/2011
310-40-65-2AddedAccounting Standards Update No. 2014-0401/17/2014
310-40-65-3AddedAccounting Standards Update No. 2014-1408/08/2014

310-40-05Overview and Background

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310-40-10Objectives

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310-40-15Scope and Scope Exceptions

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310-40-25Recognition

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310-40-30Initial Measurement

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310-40-35Subsequent Measurement

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310-40-40Derecognition

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310-40-50Disclosure

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310-40-55Implementation Guidance and Illustrations

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310-40-65Transition and Open Effective Date Information

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310-40-65-1
Paragraph superseded on 06/17/2013 after the end of the transition period stated in Accounting Standards Update No. 2011-02, Receivables (Topic 310): A Creditor's Determination of Whether a Restructuring Is a Troubled Debt Restructuring.
310-40-65-2
Paragraph superseded on 10/26/2017 after the end of the transition period stated in Accounting Standards Update No. 2014-04, Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure.
310-40-65-3
Paragraph superseded on 10/26/2017 after the end of the transition period stated in Accounting Standards Update No. 2014-14, Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40): Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure.

310-40-S50DisclosureSEC

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Impaired Loans Restructured in a Troubled Debt Restructuring

310-40-S50-1
See paragraph 310-40-S99-1, SEC Observer Comment: Applicability of the Disclosures Required by Topic 310 when a Loan is Restructured in a Troubled Debt Restructuring into Two or More Loans for SEC Staff views on disclosure related to the impact of restructuring a loan in a troubled debt restructuring into two (or more) loan agreements.

310-40-S99SEC MaterialsSEC

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SEC Staff Guidance

310-40-S99-1
The following is the text of SEC Observer Comment: Applicability of the Disclosures Required by Topic 310 when a Loan is Restructured in a Troubled Debt Restructuring into Two (or More) Loans.
  • Paragraph 310-40-50-5 states that when a loan is restructured in a troubled debt restructuring into two (or more) loan agreements, the restructured loans should be considered separately when assessing the applicability of the disclosures in paragraphs 310-10-50-15(a) and (c) in years after the restructuring because they are legally distinct from the original loan. The creditor would continue to base its measure of loan impairment on the contractual terms specified by the original loan agreement in accordance with paragraphs
    310-10-35-20 through 35-30
    . The SEC staff is concerned that disclosures of impaired loans after loans are restructured in troubled debt restructurings into multiple loan structures might, in some circumstances, imply that the quality of the loan portfolio had improved solely as a result of the troubled debt restructurings. Accordingly, the SEC staff believes that registrants should make clear to the users of the financial statements the impact of the multiple loan structures on the impaired loan disclosures.

Related subtopics