How to account received payment of interest for impaired loan?‏

[Serhii]

Accounting under IFRS. Consider from a bank's perspective.

At the beginning of 2015 the loan (renewable credit line) is impaired and allowed for 50%. The borrower did not paid interest during 2015. Redemption date is December 31, 2020. In 2015 recognized interest income was USD 600 (USD 1200 at nominal and adjustment for impairment USD -600).

Then the following options:
1) In January 2016 the borrower repaid USD 1,200 of unpaid interest for 2015. In my opinion, we recognize interest income USD 600 in January 2016. How do you think?
2) In January 2016 the borrower repaid USD 800 of unpaid interest for 2015. In my opinion, we recognize income of USD 400 in January 2016 (600 * 800/1200). How do you think?

Will be very grateful for your help!

 

[Fidget]

From the prospective of a bank, a loan is a loan and repayments are due under the terms of it, so I'm not following how the loan can be impaired, or do you mean that the person/company that received the loan isn't able to pay it?

 

[Bert82]

Unfortunately or especially "from a bank's perspective" you have to think about the interchange of their balance-sheet...

if company A has a loan at Bank B...
this will be shown at balance sheet of company A as liabilities
but for Bank B this loan in the balance sheet is an asset... so it can become impaired.