CHP5-PPT-GUINTIBANO,Clarice I..pptx
-
Upload
clarice-ilustre-guintibano -
Category
Documents
-
view
221 -
download
0
Transcript of CHP5-PPT-GUINTIBANO,Clarice I..pptx
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
1/28
CHAPTER 5ACCOUNTING FOR FINANCIALLYDISTRESSED CORPORATIONS
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
2/28
A fnancially distressed
c!"any is ne#$% &'se a(ility t cntin)e e*istence isd)(t+)l,
-% T'at is in t'e "rcess + rer.ani/atin,
0% T'at is a rer.ani/ed c!"any,
1% T'at cnte!"lates r "lans li2)idatin, r
5% T'at is )nder li2)idatin%
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
3/28
A fnancially distressed c!"any
!ay )nderta3e a#$% 4)asirer.ani/atin,
-% Tr)(led de(t restr)ct)rin., r
0% Li2)idatin
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
4/28
4UASIREORGANI6ATION4)asirer.ani/atin is a"er!issi7e ()t nt !andatry"rced)re )nder 8'ic' a fnanciallydistressed entity restates its
acc)nts and esta(lis'es a +res'start in acc)ntin. sense%
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
5/28
ILLUSTRATION 1:
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
6/28
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
7/28
TROU9LED DE9T RESTRUCTURINGTr)(led de(t restr)ct)rin. is an
arran.e!ent in 8'ic' a creditr: +recn!ic r le.al reasns related t ade(tr;s fnancial di
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
8/28
A TROU9LED DE9TRESTRUCTURING =AY 9E IN
THE FOR= OF#>$?ASSET S&AP
I+ an asset s8a": t'e de(tr trans+ers anncas' asset >real estate r t'er asset? t
t'e creditr in settle!ent + t'e lia(ility%
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
9/28
ILLUSTRATION 2: CASE 1
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
10/28
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
11/28
>-? E4UITY S&AP
In an e2)ity s8a": t'e de(tr iss)es its 8n s'ares + stc3 t t'ecreditr in settle!ent + its (li.atins% As !entined earlier: t'e +air
7al)e + t'e cnsideratin .i7en )" is less t'an t'e carryin. 7al)e +(li.atin
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
12/28
CASE 2
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
13/28
>0? =ODIFICATION OF TER=S
T'e !difcatin + ter!s !ay in7l7e t'einterest: t'e !at)rity 7al)e: r (t'% Interestcncessin !ay (e in t'e +r! + red)ctin +interest rate: "artial r +)ll cndnatin +
interest r a !ratri)! n "ay!ent +interest +r a s"ecifed "erid + ti!e%Cncessin n !at)rity 7al)e !ay incl)de"artial cndnatin + "rinci"al r ane*tensin + t'e !at)rity date%
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
14/28
ILLUSTRATION 3
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
15/28
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
16/28
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
17/28
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
18/28
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
19/28
STATE=ENT OF AFFAIRS
T'e state!ent + a@airs is in e@ect a state!ent +
"sitin +r! a 2)ittin. cncernB r a nn.in. cncernB "int + 7ie8% T'e assets arere"rted at t'eir esti!ated reali/a(le 7al)einstead + (3 7al)e%
T'e assets are nt classifed as c)rrent r
nnc)rrent: ()t re"rted as eit'er "led.ed 8it'certain creditrs r +ree and t')s a7aila(le t.eneral creditrs%
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
20/28
ILLUSTRATION 4 (EXAMPLE OF STATEMENT OF AFFAIRS)
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
21/28
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
22/28
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
23/28
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
24/28
FUNCTIONS SERED 9Y THESTATE=ENT OF AFFAIRS
T'e state!ent + a@airs 8ill assistcreditrs in deter!inin. )st 8'at "licys'all (e ad"ted r 8'at actins s'all (eta3en 8it' res"ect t t'e insl7ency%
Analysis + t'is sta!en 8ill 'el" t'e! tdecide 8'et'er an e*tensin + ti!e: ac!"sitin a.ree!ent: r s!e t'er+r! actin is in t'eir (est interests%
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
25/28
DEFICIENCY STATE=ENTA defciency state!ent is )s)ally
"re"ared t acc!"any t'e state!ent +a@airs% It indicates t'e s)rce + t'edefciency t )nsec)red creditrs
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
26/28
ILLUSTRATION 5
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
27/28
-
8/19/2019 CHP5-PPT-GUINTIBANO,Clarice I..pptx
28/28