Handbook: Accounting for bankruptcies

We address the key accounting and financial reporting issues facing companies moving through the various stages of Chapter 11 – with Q&As, interpretive guidance and examples.

Applicability

• All companies contemplating Chapter 11 bankruptcy, in Chapter 11 bankruptcy, or emerging from Chapter 11 bankruptcy

Relevant dates

• Effective immediately

Key impacts

• Updated for ASU 2021-08 (contract assets and contract liabilities from contracts with customers) under fresh-start reporting.
• Overview of bankruptcy, including the types of bankruptcies and the process from filing until emergence, plus accounting considerations for an entity anticipating bankruptcy.
• Accounting requirements of ASC 852-10 during bankruptcy, including accounting for liabilities and the presentation of reorganization items in the statement of operations.
• Criteria to qualify for fresh-start reporting, and the accounting and financial reporting considerations when emerging from bankruptcy.

Report contents

• Overview of bankruptcy
• Before bankruptcy
• During Chapter 11 bankruptcy
• Emerging from Chapter 11 bankruptcy

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