Modification gain or loss

Financial reporting - financial assets - financial liabilities - International Financial Reporting Standards (IFRS) - IFRS 9.

Under IFRS 9 (Appendix A) a modification gain or loss is an amount recognised immediately in profit or loss, from adjusting the gross carrying amount of a financial liability or asset to reflect renegotiated or modified contractual cash flows.

Accounting and tax surprises under IFRS 9

"Corporate borrowers often need to renegotiate their existing loan liabilities, and in many companies this responsibility will fall on the treasurer.

Although treasurers may not necessarily be accounting experts, they still need to carefully consider the potential accounting impacts when renegotiating loan terms.

Under IFRS 9: Financial Instruments, loan modifications can trigger gains and losses for financial reporting purposes and may even have tax implications."

Renegotiating a loan? Get the accounting right - Kern Roberts, managing director, global accounting practice lead Chatham Financial.

See also

• Derecognition
• Derivative instrument
• Extinguishment
• Fair Value Adjustment
• Financial asset
• Financial instrument
• Financial liability
• Hedge accounting
• IAS 32
• IAS 39
• IFRS 9
• IFRS 9 hedge accounting reforms: a closer reflection of risk management?
• IFRS 15
• Impairment
• International Financial Reporting Standards (IFRS)
• Modification
• Non-substantial modification
• Recognition
• Set-off
• Substantial modification

Other resources

• IFRS 9 summary - IAS Plus
• IFRS 9 full text - IFRS webpage
• Renegotiating a loan? Get the accounting right - Kern Roberts, managing director, global accounting practice lead Chatham Financial