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Loan Payable, Debt Restructuring
Loan Payable, Debt Restructuring
INiTiAL MEASM’T
FAiR VALUE LESS
TRANSACTiON
SUBSEQUENT
AMORTiZATiON
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Company X BPI COSTS
Credit evaluation
ORiGiNATiON COST Appraisal fee
Promissory note/
credit agreement Processing fee
INTERPOLATiON Effect: Higher
1. Cash 1. Loans receivable effective rate
Loans Payable Cash
LiNEAR x - lower rate
2. Interest expense 2. Cash
iNTERPOLATiON higher rate - lower rate
Cash Interest income
Debt restructuring
Accs Receivable Loans Payable (Book value)
Inventory Non-cash asset (Book value)
ASSET SWAP Non-cash asset Investments
Gain on extinguishment
DACiON Foreclosure PPE
EN PAGO of security
HiERARCHY
Creditor to Loans Payable (BV)
EQUiTY SWAP Issuance of shares shareholder Loss on extinguishment 1. FV of sh (equity)
Share Capital (par) VS 2. FV of liability
MODiFiCATiON OF TERMS Share Premium 3. BV of liability