# ASC 470-50: Debt — Modifications and Extinguishments Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/470/50/) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T00:32:44.546Z to 2026-09-10T00:33:07.253Z Record version: sha256:96b4aef8734387505570850c44614da1f3381eca78946cbe5ef04c02b42c3db0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 470-50: Debt — Modifications and Extinguishments ### Machine-generated study aids ```json { "summary": "ASC 470-50 governs the debtor's accounting for extinguishments of debt and for modifications or exchanges of debt instruments with the same creditor (excluding troubled debt restructurings under 470-60 and conversions pursuant to conversion privileges under 470-20). Its core rule is the \"10 percent cash flow test\": if the present value of cash flows under the new instrument differs by at least 10% from the PV of the remaining cash flows of the original instrument (discounted at the original instrument's effective rate), the terms are substantially different and the transaction is accounted for as an extinguishment, with the new debt recorded at fair value and gain or loss recognized currently in income. If not substantially different, no gain or loss is recognized and a new effective interest rate is computed from the original carrying amount and revised cash flows.", "key_points": [ "Any difference between the reacquisition price of debt and its net carrying amount is recognized in income in the period of extinguishment as a separate item and is never amortized to future periods (470-50-40-2); if the fair value option was elected, net carrying amount equals fair value at the reacquisition date and instrument-specific credit risk amounts in OCI are included in net income (470-50-40-2A).", "An exchange of debt instruments with substantially different terms, or a substantial modification of terms, is accounted for as an extinguishment under 405-20-40-1 (470-50-40-6); otherwise modifications produce gain or loss only if the 405-20-40-1 conditions are met (470-50-40-8).", "Instruments are 'substantially different' if the PV of the new instrument's cash flows differs by at least 10 percent from the PV of the original's remaining cash flows; even if under 10 percent, extinguishment accounting applies if the change in fair value of an embedded conversion option is at least 10 percent of the original debt's carrying amount, or if a substantive conversion option is added or eliminated (470-50-40-10).", "Mechanics of the 10 percent test: include fees paid to or received from the creditor in the new instrument's cash flows, use the variable rate in effect for floating-rate debt, test both exercise and nonexercise of call/put features and use the assumptions producing the smaller change, discount at the original instrument's effective interest rate, and use terms from a year ago if there was a prior nonsubstantial modification within the year (470-50-40-12).", "If substantially different, the new debt is initially recorded at fair value, which determines the gain or loss and the new effective rate (470-50-40-13); if not, a new effective rate is computed from the original carrying amount adjusted for an increase (but not a decrease) in the fair value of an embedded conversion option, with the offset to additional paid-in capital (470-50-40-14 through 40-15).", "Creditor fees are included in extinguishment gain or loss if extinguishment accounting applies, but are deferred with existing premium/discount and amortized over the modified debt's term if not; third-party costs (e.g., legal fees) are capitalized and amortized like debt issue costs under extinguishment accounting but expensed as incurred otherwise (470-50-40-17 through 40-18).", "Line-of-credit and revolving-debt changes are tested by comparing borrowing capacity (remaining term × maximum available credit): if new capacity is greater than or equal to old, unamortized costs, creditor fees, and third-party costs are deferred over the new arrangement; if less, unamortized deferred costs are written off in proportion to the decrease in borrowing capacity (470-50-40-21); an intermediary acting as agent is looked through, while one acting as principal is treated as a creditor (470-50-40-19 through 40-20)." ], "categories": [ "Derecognition", "Subsequent measurement", "Debt and equity", "Financial instruments" ], "audience_level": "intermediate", "student_note": "Refinancings are ubiquitous, so the modification-versus-extinguishment analysis and the resulting fee/cost treatment is a recurring practice and exam issue. Common mistakes: discounting at the new instrument's rate instead of the original effective rate, omitting creditor fees from the new cash flows, and assuming that failing the 10 percent test ends the analysis for convertible debt, where the separate conversion-option tests in 470-50-40-10(a)-(b) still apply.", "related_topics": [ "405-20", "470-20", "470-60", "815-40", "825-10", "835-30" ], "key_concepts": [ "debt extinguishment", "10 percent cash flow test", "substantially different terms", "debt modification", "embedded conversion option", "agent versus principal intermediary", "borrowing capacity", "deferred debt issuance costs" ] } ``` Source downloaded (UTC): 2026-09-10T00:32:44.546Z to 2026-09-10T00:32:44.546Z Record version: sha256:7b451ae153966468b65ee02c28cfaeab7a555955f1b94a33bb9232f2793604f4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 470-50-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/470/50/#00-status) SEC content: no ##### [470-50-00-1](https://asc.understandingaccounting.org/asc/470/50/#470-50-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:44.546Z to 2026-09-10T00:32:44.546Z Record version: sha256:363d070083a3a44ed6fec5e7cc6aa88d695b1ab4494d7cc271e95c7bef747356 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Beneficial Conversion FeatureSupersededAccounting Standards Update No. 2020-0608/05/2020
Reacquisition Price of DebtAddedAccounting Standards Update No. 2014-0603/14/2014
470-50-15-3AmendedAccounting Standards Update No. 2024-0411/26/2024
470-50-40-2AmendedAccounting Standards Update No. 2014-0603/14/2014
470-50-40-2AAddedAccounting Standards Update No. 2018-0907/16/2018
470-50-40-12AmendedAccounting Standards Update No. 2021-0405/03/2021
470-50-40-12AAddedAccounting Standards Update No. 2021-0405/03/2021
470-50-40-16SupersededAccounting Standards Update No. 2020-0608/05/2020
470-50-40-17AmendedAccounting Standards Update No. 2020-0303/09/2020
470-50-40-17AAddedAccounting Standards Update No. 2021-0405/03/2021
470-50-40-18AmendedAccounting Standards Update No. 2020-0303/09/2020
470-50-40-18AAddedAccounting Standards Update No. 2021-0405/03/2021
470-50-40-21AmendedAccounting Standards Update No. 2021-0405/03/2021
470-50-40-21AmendedAccounting Standards Update No. 2020-0303/09/2020
470-50-45-1SupersededAccounting Standards Update No. 2015-0101/09/2015
470-50-45-2SupersededAccounting Standards Update No. 2015-0101/09/2015
470-50-50-1AmendedAccounting Standards Update No. 2009-1612/23/2009
Source downloaded (UTC): 2026-09-10T00:32:47.216Z to 2026-09-10T00:32:47.216Z Record version: sha256:5228a9672f9f614a9b215b7a657db1b7e9af0d67f95fe8ba3a4be96143c4e8c9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 470-50-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/470/50/#05-overview-and-background) SEC content: no ##### [470-50-05-1](https://asc.understandingaccounting.org/asc/470/50/#470-50-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:47.216Z to 2026-09-10T00:32:47.216Z Record version: sha256:46f68a849ff58e6fdf9dc16b9923e70fab167c174b2a6468b174c96c2a36dbb7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic discusses the accounting for all extinguishments of debt instruments, except debt that is extinguished through a [troubled debt restructuring](https://asc.understandingaccounting.org/glossary/t/#troubled-debt-restructuring "A restructuring of a debt constitutes a troubled debt restructuring if the creditor for economic or legal reasons related to the debtor's financial difficulties grants a concession to the debtor that it would not otherwise consider.")(see Subtopic 470-60) or a conversion of debt to equity securities of the debtor pursuant to conversion privileges provided in terms of the debt at issuance (see Subtopic 470-20). ##### [470-50-05-2](https://asc.understandingaccounting.org/asc/470/50/#470-50-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:47.216Z to 2026-09-10T00:32:47.216Z Record version: sha256:57a74cdba6f81d67d6a0a452fdb568a68c4d6124b43ab9f93cab1552bd021aac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic also provides guidance on whether an exchange of debt instruments with the same creditor constitutes an extinguishment and whether a modification of a debt instrument should be accounted for in the same manner as an extinguishment. ##### [470-50-05-3](https://asc.understandingaccounting.org/asc/470/50/#470-50-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:47.216Z to 2026-09-10T00:32:47.216Z Record version: sha256:17270ac622faeab211ca423698b62eca7103e4100a1335a2985d7e13e80e4dd9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In circumstances where an exchange of debt instruments or a modification of a debt instrument does not result in extinguishment accounting, this Subtopic provides guidance on the appropriate accounting treatment. ##### [470-50-05-4](https://asc.understandingaccounting.org/asc/470/50/#470-50-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:47.216Z to 2026-09-10T00:32:47.216Z Record version: sha256:cc93d9e6fe9c4b435f919cff427589b1ee547976e715853479f053c6d195bffd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When debtors undergo a modification or exchange of a debt instrument, the resulting cash flows can be affected by changes in principal amounts, interest rates, or maturity. They can also be affected by fees exchanged between the debtor and creditor to effect changes in any of the following: 1. a Recourse or nonrecourse features 2. b Priority of the obligation 3. c Collateralized (including changes in collateral) or noncollateralized features 4. d Debt covenants or waivers 5. e The guarantor (or elimination of the guarantor) 6. f Option features. Source downloaded (UTC): 2026-09-10T00:32:50.760Z to 2026-09-10T00:32:50.760Z Record version: sha256:9871c9cccc2322e0732002b01f94601921a207df44e9c2e1fd5ce6b4efe963dc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 470-50-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/470/50/#15-scope-and-scope-exceptions) SEC content: no #### Entities ##### [470-50-15-1](https://asc.understandingaccounting.org/asc/470/50/#470-50-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:50.760Z to 2026-09-10T00:32:50.760Z Record version: sha256:5e777cd5732e498bd499fcffd987e5e1fb3b21b93117667e2a78c203255e8372 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to all entities. #### Transactions ##### [470-50-15-2](https://asc.understandingaccounting.org/asc/470/50/#470-50-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:50.760Z to 2026-09-10T00:32:50.760Z Record version: sha256:6fbc441d3db3a4391129a3ce50cfc94384bdf3f0b339bdbebb1c32697247df40 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies, in part, to the following transactions and activities: 1. a Extinguishments of debt effected by issuance of common or preferred stock, including redeemable and fixed-maturity preferred stock, that do not represent the exercise of a conversion right contained in the terms of the debt at issuance. ##### [470-50-15-3](https://asc.understandingaccounting.org/asc/470/50/#470-50-15-3) Pending content: yes Source downloaded (UTC): 2026-09-10T00:32:50.760Z to 2026-09-10T00:32:50.760Z Record version: sha256:b224da0e2cc052c1124b7bbf0f2a6aec0ac986c08b8e5f9306b7e6ef746dc55a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic does not apply to the following transactions and activities: 1. a Conversions of debt into equity securities of the debtor pursuant to conversion privileges provided in the terms of the debt at issuance. Additionally, the guidance in this Subtopic does not apply to conversions of convertible debt instruments pursuant to terms that reflect changes made by the debtor to the conversion privileges provided in the debt at issuance (including changes that involve the payment of consideration) for the purpose of inducing conversion. Guidance on conversions of debt instruments (including induced conversions) is contained in paragraphs [470-20-40-13](https://asc.understandingaccounting.org/asc/470/20/#470-20-40-13) and [470-20-40-15](https://asc.understandingaccounting.org/asc/470/20/#470-20-40-15). 2. b Extinguishments of debt through a [troubled debt restructuring](https://asc.understandingaccounting.org/glossary/t/#troubled-debt-restructuring "A restructuring of a debt constitutes a troubled debt restructuring if the creditor for economic or legal reasons related to the debtor's financial difficulties grants a concession to the debtor that it would not otherwise consider."). (See Section 470-60-15 for guidance on determining whether a modification or exchange of debt instruments is a troubled debt restructuring. If it is determined that the modification or exchange does not result in a troubled debt restructuring, the guidance in this Subtopic shall be applied.) 3. c Transactions entered into between a debtor or a debtor's agent and a third party that is not the creditor. Transition date:(P) December 16, 2025; (N) December 16, 2025Transition guidance: [470-20-65-4](https://asc.understandingaccounting.org/asc/470/20/#470-20-65-4)The guidance in this Subtopic does not apply to the following transactions and activities: 1. a Conversions of debt instruments pursuant to conversion privileges provided in the terms of those instruments. Additionally, the guidance in this Subtopic does not apply to conversions of convertible debt instruments pursuant to terms that reflect changes made by the debtor to the conversion privileges provided in the existing terms of those debt instruments (including changes that involve the payment of consideration) for the purpose of inducing conversion. Guidance on conversions of debt instruments (including induced conversions) is contained in paragraphs [470-20-40-4](https://asc.understandingaccounting.org/asc/470/20/#470-20-40-4), [470-20-40-13](https://asc.understandingaccounting.org/asc/470/20/#470-20-40-13), and [470-20-40-15](https://asc.understandingaccounting.org/asc/470/20/#470-20-40-15). 2. b Extinguishments of debt through a [troubled debt restructuring](https://asc.understandingaccounting.org/glossary/t/#troubled-debt-restructuring "A restructuring of a debt constitutes a troubled debt restructuring if the creditor for economic or legal reasons related to the debtor's financial difficulties grants a concession to the debtor that it would not otherwise consider."). (See Section 470-60-15 for guidance on determining whether a modification or exchange of debt instruments is a troubled debt restructuring. If it is determined that the modification or exchange does not result in a troubled debt restructuring, the guidance in this Subtopic shall be applied.) 3. c Transactions entered into between a debtor or a debtor's agent and a third party that is not the creditor. #### Other Considerations ##### [470-50-15-4](https://asc.understandingaccounting.org/asc/470/50/#470-50-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:50.760Z to 2026-09-10T00:32:50.760Z Record version: sha256:0d4cd610309842c32175b017378c40395ff450275d224b31139d7a6a5c3f2665 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The general guidance for the extinguishment of liabilities is contained in Subtopic 405-20and defines transactions that the debtor shall recognize as an extinguishment of a liability. Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:3c94e2a6de0759464d7de08332061aa92216d9cd4ff4a98e433e5850c226c060 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 470-50-40: 40 Derecognition [Read section](https://asc.understandingaccounting.org/asc/470/50/#40-derecognition) SEC content: no #### Extinguishments of Debt ##### [470-50-40-1](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:94a735d3712172cc71d037a919c8cbf6e8c31add0597a127f5192eb80db835a7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As indicated in paragraph [470-50-15-4](https://asc.understandingaccounting.org/asc/470/50/#470-50-15-4), the general guidance for the extinguishment of liabilities is contained in Subtopic 405-20 and defines transactions that the debtor shall recognize as an extinguishment of a liability. ##### [470-50-40-2](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:839d14c4f2d5fbdf896ba1599186a15f6512d9ee6bc8b4f2fb29f2f45edfa936 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A difference between the [reacquisition price of debt](https://asc.understandingaccounting.org/glossary/r/#reacquisition-price-of-debt "The amount paid on extinguishment, including a call premium and miscellaneous costs of reacquisition. If extinguishment is achieved by a direct exchange of new securities, the reacquisition price is the total present value of the new securities.") and the [net carrying amount of the extinguished debt](https://asc.understandingaccounting.org/glossary/n/#net-carrying-amount-of-debt "Net carrying amount of debt is the amount due at maturity, adjusted for unamortized premium, discount, and cost of issuance.") shall be recognized currently in income of the period of extinguishment as losses or gains and identified as a separate item. Gains and losses shall not be amortized to future periods. If upon extinguishment of debt the parties also exchange unstated (or stated) rights or privileges, the portion of the consideration exchanged allocable to such unstated (or stated) rights or privileges shall be given appropriate accounting recognition. Moreover, extinguishment transactions between related entities may be in essence capital transactions. ##### [470-50-40-2A](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-2A) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:e64b0b51e3434e486d7c802c40db1eab442bab54dd472463826abbfc9db53f46 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In an early extinguishment of debt for which the fair value option has been elected in accordance with Subtopic 815-15 on embedded derivatives or Subtopic 825-10 on financial instruments, the net carrying amount of the extinguished debt shall be equal to its fair value at the reacquisition date. In accordance with paragraph [825-10-45-6](https://asc.understandingaccounting.org/asc/825/10/#825-10-45-6), upon extinguishment an entity shall include in net income the cumulative amount of the gain or loss previously recorded in other comprehensive income for the extinguished debt that resulted from changes in instrument-specific credit risk. ##### [470-50-40-3](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:01e547ca51ee7be4b3e1fe62c9980e122f85e3a976f6d030bfcb1fa714a8189b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In an early extinguishment of debt through exchange for common or preferred stock, the reacquisition price of the extinguished debt shall be determined by the value of the common or preferred stock issued or the value of the debt—whichever is more clearly evident. #### Extinguishment of Convertible Debt ##### [470-50-40-4](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:b66fca5662641b6e2c3c6467d3b0fc1ed99005f043618bc52282a25e2323c51a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The extinguishment of convertible debt does not change the character of the security as between debt and equity at that time. Therefore, a difference between the cash acquisition price of the debt and its net carrying amount shall be recognized currently in income in the period of extinguishment as losses or gains. ##### [470-50-40-5](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:5b6ac083e7c3f435a56b293b1d90d212be7877555d1b32795b3a6ae69649b681 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic does not apply to debt tendered to exercise detachable warrants that were originally issued with that debt if the debt is permitted to be tendered towards the exercise price of the warrants under the terms of the securities at issuance. The tendering of the debt in such a case would be accounted for in the same manner as a conversion. #### Modifications and Exchanges ##### [470-50-40-6](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:9b95c8cfbfc2b551547e820804be5ff8d208308d126042e2eb8f2591ef57d735 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An exchange of debt instruments with substantially different terms is a debt extinguishment and shall be accounted for in accordance with paragraph [405-20-40-1](https://asc.understandingaccounting.org/asc/405/20/#405-20-40-1). A debtor could achieve the same economic effect as an exchange of a debt instrument by making a substantial modification of terms of an existing debt instrument. Accordingly, a substantial modification of terms shall be accounted for like an extinguishment. ##### [470-50-40-7](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:0751cc91e2bb2633fd2963c3e07f176da60db9d107158d259d3f731988a0ff03 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transactions among debt holders do not result in a modification of the original debt's terms or an exchange of debt instruments between the debtor and the debt holders and do not impact the accounting by the debtor. ##### [470-50-40-8](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:059bc9ebaf1e62395ec8ba8abecff6170d276e20292339e699671c4c5871e7c8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transactions involving the modification or exchange of debt instruments shall only result in gain or loss recognition by the debtor if the conditions for extinguishment of debt described in paragraph [405-20-40-1](https://asc.understandingaccounting.org/asc/405/20/#405-20-40-1) are satisfied or if the guidance in this Subtopic requires that accounting. ##### [470-50-40-9](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:ac2654addab48d0705edf24969f2754817313830961bf6bf84b1f623fb1c94d6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transactions involving contemporaneous exchanges of cash between the same debtor and creditor in connection with the issuance of a new debt obligation and satisfaction of an existing debt obligation by the debtor would only be accounted for as debt extinguishments if the debt instruments have substantially different terms, as defined in this Subtopic. ##### [470-50-40-10](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:953cc012f44044a6ea6cbaf7e03a28ae07302d354e6e63aaeff2a504888a6db3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. From the debtor's perspective, an exchange of debt instruments between or a modification of a debt instrument by a debtor and a creditor in a nontroubled debt situation is deemed to have been accomplished with debt instruments that are substantially different if the present value of the cash flows under the terms of the new debt instrument is at least 10 percent different from the present value of the remaining cash flows under the terms of the original instrument. If the terms of a debt instrument are changed or modified and the cash flow effect on a present value basis is less than 10 percent, the debt instruments are not considered to be substantially different, except in the following two circumstances: 1. a A modification or an exchange affects the terms of an embedded conversion option, from which the change in the [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") of the embedded conversion option (calculated as the difference between the fair value of the embedded conversion option immediately before and after the modification or exchange) is at least 10 percent of the carrying amount of the original debt instrument immediately before the modification or exchange. 2. b A modification or an exchange of debt instruments adds a substantive conversion option or eliminates a conversion option that was substantive at the date of the modification or exchange. (For purposes of evaluating whether an embedded conversion option was substantive on the date it was added to or eliminated from a debt instrument, see paragraphs [470-20-40-7 through 40-9](https://asc.understandingaccounting.org/asc/470/20/#470-20-40-7) .) ##### [470-50-40-11](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:0aa1dd2cdfc6939b5f5e40fd5c9d5403fb270a9f9e3927ef776daa69ddd03c10 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. With respect to the conditions in (a) and (b) in the preceding paragraph, this guidance does not address modifications or exchanges of debt instruments in circumstances in which the embedded conversion option is separately accounted for as a derivative under Topic 815 before the modification, after the modification, or both before and after the modification. ##### [470-50-40-12](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:c4172d7921fbd8eb9fafa9a9ef90d8edfd43c600ce4edcb48e9c632c9b46a59a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following guidance shall be used to calculate the present value of the cash flows for purposes of applying the 10 percent cash flow test described in paragraph [470-50-40-10](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-10): 1. a The cash flows of the new debt instrument include all cash flows specified by the terms of the new debt instrument plus any amounts paid by the debtor to the creditor less any amounts received by the debtor from the creditor as part of the exchange or modification. For a modification or an exchange of a freestanding equity-classified written call option held by a creditor that is a part of or directly related to a modification or an exchange of an existing debt instrument held by that same creditor (see paragraphs [815-40-35-14 through 35-15](https://asc.understandingaccounting.org/asc/815/40/#815-40-35-14) and [815-40-35-17(c)](https://asc.understandingaccounting.org/asc/815/40/#815-40-35-17)), an entity shall apply the guidance in paragraph [470-50-40-12A](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-12A). 2. b If the original debt instrument or the new debt instrument has a floating interest rate, then the variable rate in effect at the date of the exchange or modification shall be used to calculate the cash flows of the variable-rate instrument. 3. c If either the new debt instrument or the original debt instrument is callable or puttable, then separate cash flow analyses shall be performed assuming exercise and nonexercise of the call or put. The cash flow assumptions that generate the smaller change would be the basis for determining whether the 10 percent threshold is met. 4. d If the debt instruments contain contingent payment terms or unusual interest rate terms, judgment shall be used to determine the appropriate cash flows. 5. e The discount rate to be used to calculate the present value of the cash flows is the effective interest rate, for accounting purposes, of the original debt instrument. 6. f If within a year of the current transaction the debt has been exchanged or modified without being deemed to be substantially different, then the debt terms that existed a year ago shall be used to determine whether the current exchange or modification is substantially different. 7. g The change in the fair value of an embedded conversion option resulting from an exchange of debt instruments or a modification in the terms of an existing debt instrument shall not be included in the 10 percent cash flow test. Rather, a separate test shall be performed by comparing the change in the fair value of the embedded conversion option to the carrying amount of the original debt instrument immediately before the modification, as specified in paragraph [470-50-40-10(a)](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-10). ##### [470-50-40-12A](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-12A) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:4576038cd6980ffc4c7c70e1cdaed15a9d6a33fe49ff47fb6d6cec209bcc421a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a modification or an exchange of a freestanding equity-classified written call option held by a creditor is a part of or directly related to a modification or an exchange of an existing debt instrument held by that same creditor (see paragraphs [815-40-35-14 through 35-15](https://asc.understandingaccounting.org/asc/815/40/#815-40-35-14) and [815-40-35-17(c)](https://asc.understandingaccounting.org/asc/815/40/#815-40-35-17)), an increase or a decrease in the fair value of the freestanding equity-classified written call option held by the creditor, calculated in accordance with paragraph [815-40-35-16](https://asc.understandingaccounting.org/asc/815/40/#815-40-35-16), shall be included in the application of the 10 percent cash flow test described in paragraph [470-50-40-10](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-10). #### Subsequent Accounting for Modifications and Exchanges If Extinguishment Accounting Is Applied ##### [470-50-40-13](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:43fffb0cacfa13099928a89ab7243ea3948f0c405d47b9dcaddb5d9765d6b3c1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If it is determined that the original and new debt instruments are substantially different, the new debt instrument shall be initially recorded at fair value, and that amount shall be used to determine the debt extinguishment gain or loss to be recognized and the effective rate of the new instrument. #### Subsequent Accounting for Modifications and Exchanges If Extinguishment Accounting Is Not Applied ##### [470-50-40-14](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:e81fa4f1e36c4f8aec1a01ba0d590ce09a00e13c54d0137717fd8f89485c363d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If it is determined that the original and new debt instruments are not substantially different, then a new effective interest rate shall be determined based on the carrying amount of the original debt instrument, adjusted for an increase (but not a decrease) in the fair value of an embedded conversion option (calculated as the difference between the fair value of the embedded conversion option immediately before and after the modification or exchange) resulting from the modification, and the revised cash flows. ##### [470-50-40-15](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:eb09ba22479ed9700a076634985a76812d46ad076c6339ce19dc400051ab91ec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a convertible debt instrument is modified or exchanged in a transaction that is not accounted for as an extinguishment, an increase in the fair value of the embedded conversion option (calculated as the difference between the fair value of the embedded conversion option immediately before and after the modification or exchange) shall reduce the carrying amount of the debt instrument (increasing a debt discount or reducing a debt premium) with a corresponding increase in additional paid-in capital. However, a decrease in the fair value of an embedded conversion option resulting from a modification or an exchange shall not be recognized. ##### [470-50-40-16](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-16) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:aa2efdb9e1dff55b8b006296e6162de6922e686cd598220987a328860154547b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-06](https://asc.understandingaccounting.org/updates/asu-2020-06/). #### Fees between Debtor and Creditor ##### [470-50-40-17](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-17) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:db4da74207b567f2f4029fc71302ddf4ed87f6eb3d7264d1751d93147b1e234d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Fees paid by the debtor to the creditor or received by the debtor from the creditor (fees may be received by the debtor from the creditor to cancel a call option held by the debtor or to extend a no-call period) as part of the exchange or modification shall be accounted for as follows: 1. a If the exchange or modification is to be accounted for in the same manner as a debt extinguishment and the new debt instrument is initially recorded at fair value, then the fees paid or received shall be associated with the extinguishment of the old debt instrument and included in determining the debt extinguishment gain or loss to be recognized. 2. b If the exchange or modification is not to be accounted for in the same manner as a debt extinguishment, then the fees shall be associated with the replacement or modified debt instrument and, along with any existing unamortized premium or discount, amortized as an adjustment of interest expense over the remaining term of the replacement or modified debt instrument using the interest method. For fees between the debtor and creditor for exchanges of or modifications to line-of-credit or revolving-debt arrangements, see paragraph [470-50-40-21](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-21). ##### [470-50-40-17A](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-17A) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:c581d0d28e6809d5be29b4b6fd2907f2fdec59fc02a0ed0d516395d1dee755f1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An increase or a decrease in the fair value of a freestanding equity-classified written call option held by a creditor (calculated in accordance with paragraph [815-40-35-16](https://asc.understandingaccounting.org/asc/815/40/#815-40-35-16)) that is modified or exchanged as a part of or is directly related to a modification or an exchange of a debt instrument held by that same creditor (see paragraphs [815-40-35-14 through 35-15](https://asc.understandingaccounting.org/asc/815/40/#815-40-35-14) and [815-40-35-17(c)](https://asc.understandingaccounting.org/asc/815/40/#815-40-35-17)) shall be accounted for in the same manner as fees between the debtor and the creditor as described in paragraph [470-50-40-17](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-17). #### Third-Party Costs of Exchange or Modification ##### [470-50-40-18](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-18) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:7c3f38545dd5fc814723601261fb82adc3a78d6ac699a293d518b47ba5c27516 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Costs incurred with third parties directly related to the exchange or modification (such as legal fees) shall be accounted for as follows: 1. a If the exchange or modification is to be accounted for in the same manner as a debt extinguishment and the new debt instrument is initially recorded at fair value, then the costs shall be associated with the new debt instrument and amortized over the term of the new debt instrument using the interest method in a manner similar to debt issue costs. 2. b If the exchange or modification is not to be accounted for in the same manner as a debt extinguishment, then the costs shall be expensed as incurred. For third-party costs for exchanges of or modifications to line-of-credit or revolving-debt arrangements, see paragraph [470-50-40-21](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-21). ##### [470-50-40-18A](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-18A) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:efc1420c97f4ff8829caa98c12d7fe09b27197111a1973c52c259d0a0ecefdd3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An increase (but not a decrease) in the fair value of a freestanding equity-classified written call option held by a third party (calculated in accordance with paragraph [815-40-35-16](https://asc.understandingaccounting.org/asc/815/40/#815-40-35-16)) that is modified or exchanged as a part of or is directly related to a modification or an exchange of a debt instrument (see paragraphs [815-40-35-14 through 35-15](https://asc.understandingaccounting.org/asc/815/40/#815-40-35-14) and [815-40-35-17(c)](https://asc.understandingaccounting.org/asc/815/40/#815-40-35-17)) shall be accounted for in the same manner as third-party costs incurred that are directly related to the modification or exchange of a debt instrument as described in paragraph [470-50-40-18](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-18). #### Transactions Involving Third-Party Intermediaries ##### [470-50-40-19](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-19) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:80943393d1c8b5f8e8d8442751c79686417dbef8ae92d01bc40a23d1457f98bb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In transactions involving a third-party intermediary acting as agent on behalf of a debtor, the actions of the intermediary shall be viewed as those of the debtor in order to determine whether there has been an exchange of debt instruments or a modification of terms between a debtor and a creditor. Stated another way, if a third-party intermediary acts as agent, the analysis shall look through the intermediary. ##### [470-50-40-20](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-20) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:9d61459c54e663d8c37f336a52dcca4bd4b5c4f7bdbf74643b4ff7f73d97dd6f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In transactions involving a third-party intermediary acting as principal, the intermediary should be viewed as a third-party creditor similar to any other creditor in order to determine whether there has been an exchange of debt instruments or a modification of terms between a debtor and a creditor. Stated another way, if a third-party intermediary acts as principal, the analysis should not look through the intermediary. #### Line-of-Credit or Revolving-Debt Arrangements ##### [470-50-40-21](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-21) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:0c44eb2c0138da5e3998b589458e8196a618e7837671f39b350d9dc06b40acaf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Modifications to or exchanges of [line-of-credit or revolving-debt arrangements](https://asc.understandingaccounting.org/glossary/l/#line-of-credit-arrangement "A line-of-credit or revolving-debt arrangement is an agreement that provides the borrower with the option to make multiple borrowings up to a specified maximum amount, to repay portions of previous borrowings, and to then reborrow under the same contract. Line-of-credit and revolving-debt arrangements may include both amounts drawn by the debtor (a debt instrument) and a commitment by the creditor to make additional amounts available to the debtor under predefined terms (a loan commitment).") resulting in either a new line-of-credit or revolving-debt arrangement or resulting in a traditional term-debt arrangement shall be evaluated in the following manner: 1. a The debtor shall compare the product of the remaining term and the maximum available credit of the old arrangement (this product is referred to as the borrowing capacity) with the borrowing capacity of the new arrangement. 2. b If the borrowing capacity of the new arrangement is greater than or equal to the borrowing capacity of the old arrangement, then any unamortized deferred costs, any fees paid to the creditor, and any third-party costs incurred shall be associated with the new arrangement (that is, deferred and amortized over the term of the new arrangement). 3. c If the borrowing capacity of the new arrangement is less than the borrowing capacity of the old arrangement, then: 1. 1 Any fees paid to the creditor and any third-party costs incurred shall be associated with the new arrangement (that is, deferred and amortized over the term of the new arrangement). 2. 2 Any unamortized deferred costs relating to the old arrangement at the time of the change shall be written off in proportion to the decrease in borrowing capacity of the old arrangement. The remaining unamortized deferred costs relating to the old arrangement shall be deferred and amortized over the term of the new arrangement. - Fees between the debtor and the creditor include an increase or a decrease in the fair value of a freestanding equity-classified written call option held by a creditor (calculated in accordance with paragraph [815-40-35-16](https://asc.understandingaccounting.org/asc/815/40/#815-40-35-16)) that is modified or exchanged as a part of or is directly related to a modification or an exchange of a line-of-credit or revolving-debt arrangement held by that same creditor (see paragraphs [815-40-35-14 through 35-15](https://asc.understandingaccounting.org/asc/815/40/#815-40-35-14) and [815-40-35-17(c)](https://asc.understandingaccounting.org/asc/815/40/#815-40-35-17)). Third-party costs include an increase (but not a decrease) in the fair value of a freestanding equity-classified written call option held by a third party (calculated in accordance with paragraph [815-40-35-16](https://asc.understandingaccounting.org/asc/815/40/#815-40-35-16)) that is modified or exchanged as a part of or is directly related to a modification or an exchange of a line-of-credit or revolving-debt arrangement (see paragraphs [815-40-35-14 through 35-15](https://asc.understandingaccounting.org/asc/815/40/#815-40-35-14) and [815-40-35-17(c)](https://asc.understandingaccounting.org/asc/815/40/#815-40-35-17)). - For fees between the debtor and the creditor or third-party costs not related to exchanges of or modifications to a line-of-credit or revolving-debt arrangements resulting in either a new line-of-credit or revolving-debt arrangement, see paragraphs [470-50-40-17 through 40-18A](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-17). ##### [470-50-40-22](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-22) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:2386015b58f2ee4931ac17f155e316d12dd29da2fdef9a79fae9734598af35cc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic is limited to modifications to or exchanges of line-of-credit or revolving-debt arrangements by a debtor and a creditor (the same parties that were involved in the original line-of-credit or revolving-debt arrangement) in a nontroubled situation. ##### [470-50-40-23](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-23) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:56.153Z to 2026-09-10T00:32:56.153Z Record version: sha256:7b1e3408f219fc0890e180b7bc71280d31576608da93a129e61622952dfb8d72 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 1 (paragraph [470-50-55-10](https://asc.understandingaccounting.org/asc/470/50/#470-50-55-10)) for an illustration of this guidance. Source downloaded (UTC): 2026-09-10T00:32:58.747Z to 2026-09-10T00:32:58.747Z Record version: sha256:dcdd074aeba91e5422e7b82f9a5a952cdd5fa0d200c1bd0e5e7723e62904870a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 470-50-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/470/50/#45-other-presentation-matters) SEC content: no ##### [470-50-45-1](https://asc.understandingaccounting.org/asc/470/50/#470-50-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:58.747Z to 2026-09-10T00:32:58.747Z Record version: sha256:a54aabca26fa23f257404e58e7d43bb648cee1debab05b6bc3e5d28fab885c9c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2015-01](https://asc.understandingaccounting.org/updates/asu-2015-01/). ##### [470-50-45-2](https://asc.understandingaccounting.org/asc/470/50/#470-50-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:32:58.747Z to 2026-09-10T00:32:58.747Z Record version: sha256:ba9f09f41931a8cb8dbeb902e8d7847981e20260bbb2c3fc9131134837d9f300 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2015-01](https://asc.understandingaccounting.org/updates/asu-2015-01/). Source downloaded (UTC): 2026-09-10T00:33:01.603Z to 2026-09-10T00:33:01.603Z Record version: sha256:b76883a33434d83926a1a7e166afada15cc40e22fc92f2b5e58b3603c73b32fe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 470-50-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/470/50/#50-disclosure) SEC content: no ##### [470-50-50-1](https://asc.understandingaccounting.org/asc/470/50/#470-50-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:01.603Z to 2026-09-10T00:33:01.603Z Record version: sha256:81f47c8111f3b68c6e1311b01621c5e2863ff78d335ba7373ffc17f1ff0a9906 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If debt was considered to be extinguished by [in-substance defeasance](https://asc.understandingaccounting.org/glossary/i/#in-substance-defeasance "Placement by the debtor of amounts equal to the principal, interest, and prepayment penalties related to a debt instrument in an irrevocable trust established for the benefit of the creditor.") under the provisions of FASB Statement No. 76, _Extinguishment of Debt,_ before the effective date of FASB Statement No. 125, _Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,_ a general description of the transaction and the amount of debt that is considered extinguished at the end of each period that debt remains outstanding shall be disclosed. Source downloaded (UTC): 2026-09-10T00:33:05.223Z to 2026-09-10T00:33:05.223Z Record version: sha256:7710ca96f1512c86072d79c4cfdc8378cf0f98bc8243443d12729f5c9ac5ccff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 470-50-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/470/50/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [470-50-55-1](https://asc.understandingaccounting.org/asc/470/50/#470-50-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:05.223Z to 2026-09-10T00:33:05.223Z Record version: sha256:2ade9f008865c206d045e5a6764d1f483552b286029baaf7653c530c24490438 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Based on the definition of a [loan participation](https://asc.understandingaccounting.org/glossary/l/#loan-participation "A transaction in which a single lender makes a large loan to a borrower and subsequently transfers undivided interests in the loan to groups of banks or other entities."), for purposes of applying the guidance in this Subtopic, the debt instrument would be the contract between the debtor and the lead bank. Participating banks are not direct creditors but, rather, have an interest represented by a certificate of participation. In the event of a modification or exchange between the debtor and lead bank, the debtor shall apply the guidance in this Subtopic. ##### [470-50-55-2](https://asc.understandingaccounting.org/asc/470/50/#470-50-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:05.223Z to 2026-09-10T00:33:05.223Z Record version: sha256:2eab9cbe0cc42af1c45157b995f679e927463784506676377fe69e691422885f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Based on the definition of a [loan syndication](https://asc.understandingaccounting.org/glossary/l/#loan-syndication "A transaction in which several lenders share in lending to a single borrower. Each lender loans a specific amount to the borrower and has the right to repayment from the borrower. It is common for groups of lenders to jointly fund those loans when the amount borrowed is greater than any one lender is willing to lend."), for purposes of applying the guidance in this Subtopic, separate debt instruments exist between the debtor and the individual creditors participating in the syndication. If an exchange or modification offer is made to all members of the syndicate and only some of the creditors agree to the exchange or modification, the guidance in this Subtopic would be applied to debt instruments held by those creditors that agree to the exchange or modification. Debt instruments held by those creditors that do not agree would not be affected. ##### [470-50-55-3](https://asc.understandingaccounting.org/asc/470/50/#470-50-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:05.223Z to 2026-09-10T00:33:05.223Z Record version: sha256:88778835bcdddee717fb6bdc833886581d4fa3ded1947e3e7963eecccb9f71d1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In a [public debt issuance](https://asc.understandingaccounting.org/glossary/p/#public-debt-issuance "A public debt issuance occurs when a debtor issues a number of identical debt instruments to an underwriter that sells the debt instruments (in the form of securities) to various investors."), for purposes of applying the guidance in this Subtopic, the debt instrument is the individual security held by an investor, and the creditor is the security holder. If an exchange or modification offer is made to all investors and only some agree to the exchange or modification, then the guidance in this Subtopic shall be applied to debt instruments held by those investors that agree to the exchange or modification. Debt instruments held by those investors that do not agree would not be affected. ##### [470-50-55-4](https://asc.understandingaccounting.org/asc/470/50/#470-50-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:05.223Z to 2026-09-10T00:33:05.223Z Record version: sha256:d315fefe700e89eca1a14acfccf7d81f27e1bbf20053ae67f8f6e2eddfd16025 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In transactions involving a third-party investment banker acting as agent on behalf of the debtor, the activity of the investment banker is treated as if it were the activity of the debtor. Thus, if the investment banker acquires debt instruments from holders for cash, the debtor has an extinguishment even if the investment banker subsequently transfers a debt instrument with the same or different terms to the same or different investors. If the investment banker acting as agent on behalf of the debtor acquires instruments from holders by exchanging those instruments for new debt, the guidance in this Subtopic shall be applied. If the investment banker acquires debt instruments from holders for cash and contemporaneously issues new debt instruments for cash, an extinguishment has occurred only if the two debt instruments have substantially different terms, as defined in Section 470-50-40. ##### [470-50-55-5](https://asc.understandingaccounting.org/asc/470/50/#470-50-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:05.223Z to 2026-09-10T00:33:05.223Z Record version: sha256:6b671aca27ed8c09f3151b085f993f4b88e5acad1e48778dfae7e662be72f9b7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In transactions involving a third-party investment banker acting as principal, the investment banker is considered a debt holder like other debt holders. Thus, if the investment banker acting as principal acquires debt instruments from other parties, the acquisition by the investment banker does not impact the accounting by the debtor, and exchanges or modifications between the debtor and the investment banker shall follow the guidance in this Subtopic. ##### [470-50-55-6](https://asc.understandingaccounting.org/asc/470/50/#470-50-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:05.223Z to 2026-09-10T00:33:05.223Z Record version: sha256:cc67abb36f292e8bd2ad97450032f755a9dfee61c5c67dfb67b6b131cd53b119 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a debt instrument is transferred from one debt holder to another in connection with a modification or exchange, including transfers from an intermediary acting as principal to another debt holder, the debtor is not impacted by the exchange as long as the funds do not pass through the debtor or its agent. ##### [470-50-55-7](https://asc.understandingaccounting.org/asc/470/50/#470-50-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:05.223Z to 2026-09-10T00:33:05.223Z Record version: sha256:450564667b895275106d2f40b0c0c7fc15edc2ae9037af39cc97ec5ea526ae11 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transactions between a debtor and a third-party creditor should be analyzed based on the guidance in paragraph [405-20-40-1](https://asc.understandingaccounting.org/asc/405/20/#405-20-40-1) and the guidance in this Subtopic to determine whether gain or loss recognition is appropriate. Application of the guidance in this Subtopic may require determination of whether a third-party intermediary is an agent or a principal and consideration of legal definitions may be helpful in making that determination. Generally, an agent acts for and on behalf of another party. Therefore, a third-party intermediary is an agent of a debtor if it acts on behalf of the debtor. In addition, an evaluation of the facts and circumstances surrounding the involvement of a third-party intermediary should be performed. The following indicators should be considered in that evaluation: 1. a If the intermediary's role is restricted to placing or reacquiring debt for the debtor without placing its own funds at risk, that would indicate that the intermediary is an agent. For example, that may be the case if the intermediary's own funds are committed and those funds are not truly at risk because the intermediary is made whole by the debtor (and therefore is indemnified against loss by the debtor). If the intermediary places and reacquires debt for the debtor by committing its funds and is subject to the risk of loss of those funds, that would indicate that the intermediary is acting as principal. 2. b In an arrangement where an intermediary places notes issued by the debtor, if the placement is done under a best-efforts agreement, that would indicate that the intermediary is acting as agent. Under a best-efforts agreement, an agent agrees to buy only those securities that it is able to sell to others; if the agent is unable to remarket the debt, the issuer is obligated to pay off the debt. The intermediary may be acting as principal if the placement is done on a firmly committed basis, which requires the intermediary to hold any debt that it is unable to sell to others. 3. c If the debtor directs the intermediary and the intermediary cannot independently initiate an exchange or modification of the debt instrument, that would indicate that the intermediary is an agent. The intermediary may be a principal if it acquires debt from or exchanges debt with another debt holder in the market and is subject to loss as a result of the transaction. 4. d If the only compensation derived by an intermediary from its arrangement with the debtor is limited to a preestablished fee, that would indicate that the intermediary is an agent. If the intermediary derives gains based on the value of the security issued by the debtor, that would indicate that the intermediary is a principal. ##### [470-50-55-8](https://asc.understandingaccounting.org/asc/470/50/#470-50-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:05.223Z to 2026-09-10T00:33:05.223Z Record version: sha256:9d0a1bf6172f690b7a19aa4e777952c9acd86b576e58d9932ac7311ba17e8fd5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic applies to transactions in which the terms of a debt instrument are modified through execution of a binding contract between the debtor and creditor that requires a debt instrument to be redeemed at a future date for a specified amount. ##### [470-50-55-9](https://asc.understandingaccounting.org/asc/470/50/#470-50-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:05.223Z to 2026-09-10T00:33:05.223Z Record version: sha256:e1bf385b52d773625db3e3a04d5cff6f329281a168841966d10a619809063b18 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following situations do not result in an extinguishment and would not result in gain or loss recognition under either paragraph [405-20-40-1](https://asc.understandingaccounting.org/asc/405/20/#405-20-40-1) or this Subtopic: 1. a An announcement of intent by the debtor to call a debt instrument at the first call date 2. b [In-substance defeasance](https://asc.understandingaccounting.org/glossary/i/#in-substance-defeasance "Placement by the debtor of amounts equal to the principal, interest, and prepayment penalties related to a debt instrument in an irrevocable trust established for the benefit of the creditor.") 3. c An agreement with a creditor that a debt instrument issued by the debtor and held by a different party will be redeemed. #### Illustrations ##### [470-50-55-10](https://asc.understandingaccounting.org/asc/470/50/#470-50-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:05.223Z to 2026-09-10T00:33:05.223Z Record version: sha256:8860aaaf38a79e6c2a183c5484307d2549dc2f112243a02a35b10f2e16bbd76f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the application of the guidance in paragraphs [470-50-40-21 through 40-22](https://asc.understandingaccounting.org/asc/470/50/#470-50-40-21) for changes in [line-of-credit or revolving-debt arrangements](https://asc.understandingaccounting.org/glossary/l/#line-of-credit-arrangement "A line-of-credit or revolving-debt arrangement is an agreement that provides the borrower with the option to make multiple borrowings up to a specified maximum amount, to repay portions of previous borrowings, and to then reborrow under the same contract. Line-of-credit and revolving-debt arrangements may include both amounts drawn by the debtor (a debt instrument) and a commitment by the creditor to make additional amounts available to the debtor under predefined terms (a loan commitment)."). ##### [470-50-55-11](https://asc.understandingaccounting.org/asc/470/50/#470-50-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:05.223Z to 2026-09-10T00:33:05.223Z Record version: sha256:ad6439aa2e9c8ebe957d4da9f1adf2ca6634996506a42301bb21e2dc36b16934 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Terms of original arrangement are as follows: 1. a Five-year term (three years remaining) 2. b $10 million commitment amount 3. c The borrowing capacity under the original arrangement at the time of the change is $30 million, the product of the remaining term (3 years) and the commitment amount ($10 million). ##### [470-50-55-12](https://asc.understandingaccounting.org/asc/470/50/#470-50-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:05.223Z to 2026-09-10T00:33:05.223Z Record version: sha256:bb016ba34761cfcef40e6f870c9864ea061629e543b04d4dff248e928f5a24c0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following situations represent changes that are made (with the same creditor) to the original terms: 1. a The commitment amount is increased to $15 million, the term of the new arrangement remains at 3 years (borrowing capacity is $45 million). 2. b The commitment amount is decreased to $2 million, the term of the new arrangement is 5.5 years (borrowing capacity is $11 million). 3. c The original revolver is replaced with a 3-year, $7.5 million term loan, with principal due at the end of 3 years (borrowing capacity is $22.5 million). 4. d The original revolver is replaced with a 3-year, $10 million term loan, with principal due at the end of 3 years (borrowing capacity is $30 million). ##### [470-50-55-13](https://asc.understandingaccounting.org/asc/470/50/#470-50-55-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:05.223Z to 2026-09-10T00:33:05.223Z Record version: sha256:c4d98c77731fb772c780ea193576eae0451dafb27ab36bb4e937327fdfa3cf2f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In all of the situations described, at the time the change is made to the original arrangement, $150,000 of unamortized costs relating to the original arrangement remain on the debtor's balance sheet; the debtor pays a fee of $100,000 to the creditor; and the debtor incurs third-party costs of $200,000. - The following illustrates the various situations described in this Example. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-43E70402-AEF2-4168-BE3B-F2E1D57509AC-low.gif) Case Old Borrowing Capacity New Borrowing Capacity Accounting Treatment of Unamortized Deferred Costs Accounting Treatment of Fees and Third-Party Costs Incurred A 30 million 45 million "$150,000 is amortized over 3 years." "$300,000 is deferred and amortized over 3 years." B 30 million 11 million "63 percent of the unamortized costs ($94,500) are written off; the remaining costs ($55,500) are amortized over 5.5 years." "$300,000 is deferred and amortized over 5.5 years." C 30 million 22.5 million "25 percent of the unamortized costs ($37,500) are written off; the remaining costs ($112,500) are amortized over 3 years." "$300,000 is deferred and amortized over 3 years." D 30 million 30 million "$150,000 is amortized over 3 years." "$300,000 is deferred and amortized over 3 years."