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NAFCU's webcast, "Troubled Debt Restructuring: A Review," yesterday offered tips for credit unions on how to handle troubled debt restructuring while taking into account generally accepted accounting principles.

Charles Kelly, senior audit manager of CliftonLarsonAllen LLP, discussed how to handle TDR transactions, NCUA reporting requirements and how to develop a comprehensive TDR program.

Kelly said he gets a lot of questions from credit unions on getting loans out of "TDR jail" and whether or not that option is acceptable under GAAP. He also mentioned questions about how to modify loans in a way that avoids qualifying them as TDRs. "If you're asking the question, you obviously think there's a possibility here that it's a troubled debt restructuring," he noted – and advised being realistic and cautious.

Kelly said that while TDRs are more common since the financial crisis, they have existed since 1977: "This is not a new concept by any stretch."

Kelly also described the accounting standards for TDRs set by the Financial Accounting Standards Board, and NCUA rules for regulatory reporting that were revised in 2012.

The webcast will remain available on demand for one year through NAFCU's Online Training Center.