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Debtor Gain

In a loan modification scenario, under what circumstances would a debtor record a gain? What is the key difference in the way the creditor calculates its loss from the way the debtor calculates its gain? One of the shortcomings of FASB114 is that it addresses mainly the creditor and not the debtor, thus leaving us with two different ways of addressing the gain (for the debtor) and loss (for the creditor).

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In a loan modification scenario, under what circumstances would a debtor record a gain? What is the key difference in the way the creditor calculates its loss from the way the debtor calculates its gain? One of the shortcomings of FASB114 is that it addresses mainly the creditor and not the debtor, thus leaving us with two different ways of addressing the gain (for the debtor) and loss (for the ...

Solution Summary

This explination explains how in a loan modification scenario, a debtor would record a gain in addition to differences in the way the creditor calculates its loss from the way the debtor calculates its gain.

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