M Ltd took out a $100 000 bank loan with AAB Bank on 1 August 2013. The loan agreement provided for a 7% fixed rate of interest with interest paid annually in arrears, and a repayment date of 31 July 2018. During the year ended 31 July 2016, M suffered a drop in sales and as a result renegotiated the terms of the bank loan such that the repayment date is extended to 31 July 2020 and a new interest rate of 4% is applied to the loan with effect from 1 August 2016. Required: Explain how the renegotiation of the loan should be treated in the financial statements for the year ended 31 July 2017, according to IFRS 9 Financial instruments under the following situations.