How to account received payment of interest for impaired loan?‏

Question

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!

Answer 1

1. If management judgement is such that the indicators of the impairment no longer exist you can reverse the impairment provision in full.
2. That looks okay to me. but again its your judgement.