# ASC 470-60-15: Debt — Troubled Debt Restructurings by Debtors — 15 Scope and Scope Exceptions Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/470/60/#15-scope-and-scope-exceptions) 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): 2026-09-10T00:33:19.847Z to 2026-09-10T00:33:19.847Z Record version: sha256:220d1b6ba310cc6ba714505f595c9d21b489b370ac42dc59d1fc4f86c8215ccb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 470-60-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/470/60/#15-scope-and-scope-exceptions) SEC content: no #### Entities ##### [470-60-15-1](https://asc.understandingaccounting.org/asc/470/60/#470-60-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:19.847Z to 2026-09-10T00:33:19.847Z Record version: sha256:3e73c164461b1515d6fa7187ba00a5daa0dc88a8d4517a41ebd0723fe4bc241f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to all debtors. #### Transactions ##### [470-60-15-2](https://asc.understandingaccounting.org/asc/470/60/#470-60-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:19.847Z to 2026-09-10T00:33:19.847Z Record version: sha256:4e1ee403836440309d1453a960274cf3cd9c7e5e0539e2473c451fde4d1ef810 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to all [troubled debt restructurings](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.") by debtors. ##### [470-60-15-3](https://asc.understandingaccounting.org/asc/470/60/#470-60-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:19.847Z to 2026-09-10T00:33:19.847Z Record version: sha256:f54c8d32ae5a1e46d13d262fbd1811a4f08f32d6ac08941b8cc259bb81d83a2a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2022-02](https://asc.understandingaccounting.org/updates/asu-2022-02/). ##### [470-60-15-4](https://asc.understandingaccounting.org/asc/470/60/#470-60-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:19.847Z to 2026-09-10T00:33:19.847Z Record version: sha256:fac34ba45f1dce346c2d48a1a8d5ba8e5a7983322c8c06eb5a54a225dbb1d588 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The substance rather than the form of the payable shall govern. Payables that may be involved in troubled debt restructurings commonly result from borrowing of cash, or purchasing goods or services on credit. Examples are accounts payable, notes, debentures and bonds (whether those payables are secured or unsecured and whether they are convertible or nonconvertible), and related accrued interest, if any. Typically, each payable is negotiated separately, but sometimes two or more payables are negotiated together. For example, a debtor may negotiate with a group of creditors but sign separate debt instruments with each creditor. For purposes of this Subtopic, restructuring of each payable, including those negotiated and restructured jointly, shall be accounted for individually. ##### [470-60-15-4A](https://asc.understandingaccounting.org/asc/470/60/#470-60-15-4A) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:19.847Z to 2026-09-10T00:33:19.847Z Record version: sha256:646ce8cc5d5606824bce1ea72c97166fb04004c7f454585778167ad8181ad009 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Subtopic, a receivable or a payable (collectively referred to as debt) represents a contractual right to receive money or a contractual obligation to pay money on demand or on fixed or determinable dates that is already included as an asset or a liability in the creditor's or debtor's balance sheet at the time of the restructuring. ##### [470-60-15-5](https://asc.understandingaccounting.org/asc/470/60/#470-60-15-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:19.847Z to 2026-09-10T00:33:19.847Z Record version: sha256:54c5055fa53b9c201b9fc87f7e8d64a8413284f48aad0f48c93b46a23a2ab386 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A restructuring of a debt constitutes a troubled debt restructuring for purposes of this Subtopic 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. ##### [470-60-15-6](https://asc.understandingaccounting.org/asc/470/60/#470-60-15-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:19.847Z to 2026-09-10T00:33:19.847Z Record version: sha256:3b395a3a815388d17d99da1dbd9be4c87abd8ddee08d3d3356f100c9af8825f1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. That concession is granted by the creditor in an attempt to protect as much of its investment as possible. That concession either stems from an agreement between the creditor and the debtor or is imposed by law or a court; for example, either of the following circumstances might occur: 1. a A creditor may restructure the terms of a debt to alleviate the burden of the debtor's near-term cash requirements, and many troubled debt restructurings involve modifying terms to reduce or defer cash payments required of the debtor in the near future to help the debtor attempt to improve its financial condition and eventually be able to pay the creditor. 2. b The creditor may accept cash, other assets, or an equity interest in the debtor in satisfaction of the debt though the value received is less than the amount of the debt because the creditor concludes that step will maximize recovery of its investment. Although troubled debt that is fully satisfied by foreclosure, repossession, or other transfer of assets or by grant of equity securities by the debtor is, in a technical sense, not restructured, that kind of event is included in the term _troubled debt restructuring_ in this Subtopic. ##### [470-60-15-7](https://asc.understandingaccounting.org/asc/470/60/#470-60-15-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:19.847Z to 2026-09-10T00:33:19.847Z Record version: sha256:bbe5449cbb0a9a4abd3c494bbac6547fc9d6064a89f053f54496775a660bf556 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Whatever the form of concession granted by the creditor to the debtor in a troubled debt restructuring, the creditor's objective is to make the best of a difficult situation. That is, the creditor expects to obtain more cash or other value from the debtor, or to increase the probability of receipt, by granting the concession than by not granting it. ##### [470-60-15-8](https://asc.understandingaccounting.org/asc/470/60/#470-60-15-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:19.847Z to 2026-09-10T00:33:19.847Z Record version: sha256:9f0258dae3215ce3c77ac78c0d9ff6a815db2f774c3d1a30b478ca423bdc4cf1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In general, a debtor that can obtain funds from sources other than the existing creditor at market interest rates at or near those for nontroubled debt is not involved in a troubled debt restructuring. A debtor in a troubled debt restructuring can obtain funds from sources other than the existing creditor in the troubled debt restructuring, if at all, only at effective interest rates (based on market prices) so high that it cannot afford to pay them. ##### [470-60-15-9](https://asc.understandingaccounting.org/asc/470/60/#470-60-15-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:19.847Z to 2026-09-10T00:33:19.847Z Record version: sha256:760b0844a362ca3c9be51b945083411dedb18d2fd4835a2a19622ee234b496d8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A troubled debt restructuring may include, but is not necessarily limited to, one or a combination of the following: 1. a Transfer from the debtor to the creditor of receivables from third parties, real estate, or other assets to satisfy fully or partially a debt (including a transfer resulting from foreclosure or repossession) 2. b Issuance or other granting of an equity interest to the creditor by the debtor to satisfy fully or partially a debt unless the equity interest is granted pursuant to existing terms for converting the debt into an equity interest 3. c Modification of terms of a debt, such as one or a combination of any of the following: 1. 1 Reduction (absolute or contingent) of the stated interest rate for the remaining original life of the debt 2. 2 Extension of the maturity date or dates at a stated interest rate lower than the current market rate for new debt with similar risk 3. 3 Reduction (absolute or contingent) of the face amount or maturity amount of the debt as stated in the instrument or other agreement 4. 4 Reduction (absolute or contingent) of accrued interest. ##### [470-60-15-10](https://asc.understandingaccounting.org/asc/470/60/#470-60-15-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:19.847Z to 2026-09-10T00:33:19.847Z Record version: sha256:353358fbe0217d093da121f49cb655d1af7c082c55c3ebfad2bd162e2137fab4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic shall be applied to all troubled debt restructurings including those consummated under reorganization, arrangement, or other provisions of the Federal Bankruptcy Act or other federal statutes related thereto. This Subtopic does not apply, however, if under provisions of those federal statutes or in a quasi-reorganization or corporate readjustment (see Topic 852) with which a troubled debt restructuring coincides, the debtor restates its liabilities generally, that is, if such restructurings or modifications accomplished under purview of the bankruptcy court encompass most of the amount of the debtor's liabilities. ##### [470-60-15-11](https://asc.understandingaccounting.org/asc/470/60/#470-60-15-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:19.847Z to 2026-09-10T00:33:19.847Z Record version: sha256:e93eaaf98053eca70f9c83871cc470f1694d674b093bb5095c5b3bd75533bbc6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For purposes of this Subtopic, none of the following are considered troubled debt restructurings: 1. a [Lease modifications](https://asc.understandingaccounting.org/glossary/l/#lease-modification "A change to the terms and conditions of a contract that results in a change in the scope of or the consideration for a lease (for example, a change to the terms and conditions of the contract that adds or terminates the right to use one or more underlying assets or extends or shortens the contractual lease term).") (for guidance, see Topic 842) 2. b Changes in employment-related agreements, for example, pension plans and deferred compensation contracts 3. c Unless they involve an agreement between debtor and creditor to restructure, neither of the following: 1. 1 Debtors' failures to pay trade accounts according to their terms 2. 2 Creditors' delays in taking legal action to collect overdue amounts of interest and principal. ##### [470-60-15-12](https://asc.understandingaccounting.org/asc/470/60/#470-60-15-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:19.847Z to 2026-09-10T00:33:19.847Z Record version: sha256:25dfe58694759df6b0e1c0007d9f4ee5b7f48f3feb86fef05a3775b55a1e4ef5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A debt restructuring is not necessarily a troubled debt restructuring for purposes of this Subtopic even if the debtor is experiencing some financial difficulties. For example, a troubled debt restructuring is not involved if any of the following circumstances exist: 1. a 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 cash, other assets, or an equity interest accepted by a creditor from a debtor in full satisfaction of its receivable at least equals the creditor's [amortized cost basis](https://asc.understandingaccounting.org/glossary/a/#amortized-cost-basis "The amortized cost basis is the amount at which a financing receivable or investment is originated or acquired, adjusted for applicable accrued interest, accretion, or amortization of premium, discount, and net deferred fees or costs, collection of cash, writeoffs, foreign exchange, and fair value hedge accounting adjustments.") in the receivable. 2. b The fair value of cash, other assets, or an equity interest transferred by a debtor to a creditor in full settlement of its payable at least equals the debtor's carrying amount of the payable. 3. c The creditor reduces the effective interest rate on the debt primarily to reflect a decrease in market interest rates in general or a decrease in the risk so as to maintain a relationship with a debtor that can readily obtain funds from other sources at the current market interest rate. 4. d The debtor issues in exchange for its debt new marketable debt having an effective interest rate based on its market price that is at or near the current market interest rates of debt with similar maturity dates and stated interest rates issued by nontroubled debtors. ##### [470-60-15-13](https://asc.understandingaccounting.org/asc/470/60/#470-60-15-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:33:19.847Z to 2026-09-10T00:33:19.847Z Record version: sha256:abb3f92e520c16f0e02d0b595f9ae1abd2b8dc8caa50f438407df0864019b0af Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For further guidance on determining whether a modification or exchange is a troubled debt restructuring, see paragraphs [470-60-55-4 through 55-7](https://asc.understandingaccounting.org/asc/470/60/#470-60-55-4) . If a debtor concludes that the modification or exchange is not within the scope of this Subtopic, the debtor would apply the provisions of Subtopic 470-50.