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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Notes & Samples

NOTE 29 – Troubled Debt Restructuring

Disclosure by Creditor

Per GASB 62, paragraphs 162–163, a creditor discloses the following information in the notes to the financial statements:

  • Outstanding receivables whose terms have been modified in troubled debt restructurings, listed by major category:
    • Aggregate recorded investment
    • Gross interest revenue, reported if the following conditions exist:
      • Receivables were current in accordance with their original terms
      • Receivables were outstanding throughout the fiscal year or since origination
      • Receivables were held for part of the fiscal year
    • Amount of interest revenue on those receivables included in changes in net assets for the fiscal year
  • Amount of commitments (if any) to lend additional resources to debtors

The creditor does not need to disclose the receivable if, subsequent to restructuring, its effective interest rate is equal to or greater than the rate that the creditor is willing to accept for a new receivable with comparable risk.

Disclosure by Debtor

Per GASB 62, paragraphs 147–148, a debtor discloses the following information in the notes to the financial statements:

  • For each restructuring: a description of the principal changes in terms, the major features of settlement, or both

    Note: The same category of payables (such as accounts payable and bonds payable) can be grouped for separate restructurings that occur within a fiscal year.

  • Aggregate gain on restructuring of payables
  • Aggregate net gain or loss recognized on transfer of assets

For periods after the troubled debt restructuring, the debtor must disclose the following information if contingently payable amounts are included in the carrying amount of restructured payables:

  • Total amounts contingently payable on the restructured payables
  • Conditions under which the contingent payable amounts would become payable or would be forgiven

Submit a copy of the agency’s Note 29 from its published AFR through the ONDSS web application. The required format is a Microsoft Word document (latest version: docx) with header information that includes: agency name/number and note number/name. If Note 29 does not apply, do not submit a note to indicate “not applicable.”

Glenn Hegar
Texas Comptroller of Public Accounts
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