Banks to Get Relief From Troubled Debt Restructuring Accounting

Goodbye to the separate accounting rules for the big breaks on repayment that lenders give to struggling customers.

U.S. accounting rulemakers on the Financial Accounting Standards Board agreed unanimously on Wednesday to nix separate recognition and measurement requirements for loan modifications that qualify as so-called troubled debt restructurings.

“The utility that it once had isn’t there any longer, particularly for entities that have adopted the expected credit loss model,” FASB member Susan Cosper said.

If banks offer breaks to customers, however, they would still have to reveal the details about borrowers facing financial difficulties in their ...