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In this session, we will be discussing troubled debt restructuring, specifically focusing on the option of modifying the terms of the loan. There are two treatments when modifying the terms: when future cash flow is less than the carrying value or when it is greater. Troubled debt restructuring occurs when a creditor grants concessions to a debtor, which is not made under normal circumstances. This was common during the real estate crash of 2007-2008, especially for construction companies.