I have trouble understanding this topic specially when there is a “combination” of terms.

I am lost with the difference between the ordinary gain and the gain on the restructuring of the debt itself. Even worst sometimes there is Extraordinary gain and ordinary gain in restructuring and a combination with impaired loans altogether make me sweat.

What is the key in getting these?  Like "all" you need to remember is ..... ???

Thank you in advance!

I'm kind of confused on what you are asking.  But I think Becker's MCQ CPA-00762 kind of addresses this.  In this case, they give a machine in replacement of debt.  So you recognize a loss on the machine for FV-CV (same as if you'd sold the machine).  Then you also recognize a gain on the restructuring of the debt for the amount debt forgiven, which is equal to the CV of debt minus the FV of the machine you give up. 

Both of these are ordinary gains/losses because it states that this is a usual and frequent occurence.

If it had been unusual and infrequent, I believe that the loss on the machine would be ordinary (because it's ordinary to dispose of machines), and the gain on the debt restructuring would be extraordinary (because I'm assuming the problem stated this was an unusual/infrequent occurence). 

Please correct me if I am wrong.

This might help.

http://www.cpanet.com/cpa_forum/forum_posts.asp?TID=23344&am p;PN=3

Thanks, CPATx...that is a great question! 

Utesa, this further emphasizes the point that they will most likely tell you whether it should be an extraordinary or ordinary gain.  (It can be either one, but depends on the circumstance; therefore they pretty much have to spell it out for you).