Borrower’s accounting for debt restructurings: 5 things to know

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10/15/19

What should borrowers be thinking about when they restructure their debt? We share 5 things you need to know.

Companies may restructure their debt before the debt is due, and the accounting can get complex. Listen as Suzanne Stephani, a director in our National office, joins Heather Horn to explain the various models and key accounting considerations. Topics include:

  • 1:21 - Overview on debt restructuring. Does the guidance need to be applied any time you make a change to your debt? We start by looking at what to think about first. 
  • 12:52 - The 10% test. If the lender remains the same, the 10% test is important in determining if the restructuring should be accounted for as a debt modification or an extinguishment. Suzanne explains.
  • 20:55 - The statement of cash flows. We wrap up by discussing how debt restructuring fees should be presented on the statement of cash flows.

About our guest

Suzanne Stephani is a director in PwC’s National office with more than 20 years of experience assisting companies in resolving complex accounting issues. Suzanne specializes in the accounting for debt, preferred stock, leases and cash flows. Suzanne is also the lead producer and director of PwC's popular quarterly accounting and reporting developments webcast.


About our host

Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting. 

Contact us

Heather Horn

Heather Horn

US Strategic Thought Leader, National Professional Services Group, PwC US

David Schmid

David Schmid

International Accounting Leader, National Professional Services Group, PwC US

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