Upcoming accounting standard presents window of opportunity to restructure debt

Banks and other lenders should consider restructuring their loan losses before Statement of Financial Accounting Standard (SFAS) No. 114 is in effect on Dec 15, 1994. A decision on whether to restructure a loan prior to the adoption of SFAS No. 114 would not change the economic outcome of the lender's portfolio, but it would allow the lender to reduce future interest income from the loan. Restructured loans declared prior to Dec 15, 1994, would be accounted for based on the SFAS No. 15 accounting standard.
THE IMPACT will depend upon the composition of the lender's loan portfolio. By restructuring their troubled loans before a new FASB accounting standard takes effect, banks and other lenders can [...]