FASB Debt — Modifications and Extinguishments of Liabilities

Published: May 25, 2025

The TXCPA Professional Standards Committee submitted a comment letter to the FASB in response to the proposed Accounting Standards Update on Debt-Modifications and Extinguishments and Liabilities–Extinguishments of Liabilities.

FASB

(May 20, 2025) The TXCPA Professional Standards Committee (PSC) submitted a comment letter to the Financial Accounting Standards Board (FASB) in response to the proposed Accounting Standards Update (ASU) on Debt-Modifications and Extinguishments and Liabilities–Extinguishments of Liabilities (File Ref. No. 2025-ED200).

The PSC commended FASB’s efforts to simplify accounting for debt exchanges involving multiple creditors, supporting the proposal to treat such exchanges as extinguishments of old debt and issuances of new debt. The committee believes the amendments will improve consistency, align better with economic substance, reduce costs, and provide investors with more decision-useful information.

While the PSC agreed with most of the proposed scope and conditions, it recommended removing the term “customary marketing process” due to potential application and audit challenges. The committee also supported prospective application and early adoption without requiring retrospective adjustments or extensive transition disclosures.

The PSC concluded that the proposed amendments will streamline debt accounting practices, particularly for complex transactions involving multiple creditors.

View request for comment | View TXCPA PSC comment letter

 

 

 

Topics:

You May be Interested in

  • TXCPA Opposition to IRS OPR-RPO Consolidation
    In a letter to the IRS, TXCPA opposed the merger of the Office of Professional Responsibility and the Return Preparer Office, saying it risks blurring the line between licensed and unlicensed preparers. TXCPA urged keeping the offices independent.
  • Foreign Currencies: QBUs and Their New 2025 Filing Requirements
    There are new IRS filing requirements affecting taxpayers with foreign Qualified Business Units. Fluctuations in exchange rates can create gains or losses when converting foreign income back to U.S. dollars, making compliance more complicated.
  • AICPA Calls for Congressional Support of Accounting STEM Pathway
    The AICPA and all 54 state CPA societies are urging Congress to recognize accounting as a STEM pathway to help strengthen the talent pipeline and reflect the profession’s growing role in technology and data.
More News

Support the Next Generation

Donate to TXCPA scholarships and help aspiring accountants achieve their goals.

Scholarships