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.514 Effect of a loan modification when the loan is part of a pool that is accounted for as a single asset
Publication date: 17 Dec 2019
us Impairment (pre-ASC 326) ARM 3560.514
ASC 310-30-15-6 allows acquired assets with common risk characteristics to be accounted for in the aggregate as a pool. The pool then becomes a single unit of account. Under ASC 310-30, the impairment analysis is also performed on the pool as a whole, as opposed to an individual loan. Questions have arisen about whether a loan should be removed from the pool upon a modification that would constitute a troubled debt restructuring.
As discussed in ASC 310-30-40-1 through 40-2, once a pool of loans is assembled, the integrity of that pool should be maintained unless the loan is (a) sold, foreclosed, or otherwise satisfied or (b) written off. Modifications of loans that are accounted for within a pool should not result in the removal of those loans from the pool, even if the modification of those loans would otherwise be considered a troubled debt restructuring.
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