The following is a simple guide assuming standard mortgage financing activities for real estate: The following table sets forth the treatment of new and previously incurred costs of financing activities with the same lender: For the purposes of this example, we did not contemplate financing transactions with multiple lenders, put or call options, discounts or premiums, or troubled debt restructuring, etc. and exclusions can potentiallyapply, as discussed further below. %PDF-1.4 1A. If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognised as part of the gain or loss on the extinguishment. Deloitte A Roadmap to Distinguishing Liabilities From Equity (2020) Chapter 3 — Contract Analysis 33 3.1 Identifying and Evaluating Contractual Terms 33 3.2 Nonsubstantive or Minimal Features 34 3.2.1 Overview 34 3.2.2 Examples 35 3.2.2.1 Mandatorily Redeemable Preferred Shares With a Nonsubstantive Conversion Option 35 }F�rԹ�B��������^q1�} �[?w����.Fʽ;��X4.FYs:��A��g~�Z�?�y�^��.o����8]�wf����26K@]���Lm�?�n��d��p�ήS EisnerAmper discusses a summary of CARES Act and how self-employed individuals, independent contractors or sole proprietors must submit necessary documentation. /Group <> 4 0 obj extinguishment of the old debt instrument and included in determining the debt extinguishment gain or loss to be recognized. As auditors charge through busy season, the question becomes: Was this properly accounted for in accordance with the applicable financial reporting framework? and circumstances, then the borrower must determine whether it should apply the accounting model for a debt modification or extinguishment. 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