We are unable to determine whether this modification would be considered troubled debt restructuring under generally accepted accounting principles (GAAP) based on the information provided.  

For a debt restructuring to qualify as a “troubled debt restructuring,” GAAP requires that the creditor grant a concession to the borrower that it would not otherwise consider, for “economic or legal reasons related to the debtor’s financial difficulties.”

In this case, you have not indicated the modification is a concession that you would not otherwise consider. Even if the changes are a concession on your part, you still must make a separate assessment to determine whether the debtor is experiencing financial difficulties, which you have not stated has been performed here.

For resources related to our guidance, please see:

• Interagency Supervisory Guidance Addressing Certain Issues Related to Troubled Debt Restructurings, Footnote 3 (“According to U.S. generally accepted accounting principles (GAAP), a restructuring of a debt constitutes a troubled debt restructuring if the creditor for economic or legal reasons related to the debtor’s financial difficulties grants a concession to the debtor that it would not otherwise consider.”)

• Financial Accounting Standards Board, Accounting Standards Update, A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring, pg. 1 (April 2011) (“In evaluating whether a restructuring constitutes a troubled debt restructuring, a creditor must separately conclude that both of the following exist: 1. The restructuring constitutes a concession. 2. The debtor is experiencing financial difficulties.”)

• 2017 GAAP Guide Vol. 1, Restatement and Analysis of Current FASP Standards, pp. 18-010–18-028.