What' is the difference b/w "Rescheduling" and "Restructuring" a loan, from legal and accounting perspective?

Question

What' is the difference b/w "Rescheduling" and "Restructuring" a loan, from legal and accounting perspective?

Answer 1

The basic difference is that on 'rescheduling', lesser things happens. What normally being re-arrange is the terms of repayment & may include the interest rate. Supposed that the organization is default & can't repay the loan they have according to the current terms. YET, they're actually confidence that they can repay back, if the terms is made more lenient (instead of 10 years monthly repayment, it's changed to 20 years quarterly repayment). This is normal, if problem is actually with the cash flows.

Restructuring is more complicated. It might include additional loan, change of terms of payment, changing a portion of the loan into a donation for cause etc etc.

From legal, that would always means new loan contract & all the required documentations. From accounting that means restatement of the interest payables (if any).