2022 FASB Review for Industry (Course Id 1995)

Accounting - Accounting for Course Id 1995

The purpose of this course is to inform the reader of the various changes affecting accounting and financial reporting, as well as a review and recall of existing accounting standards. Topics include a summary of newly issued FASB statements, current and pending developments, the new lease standard,  practice issues, a discussion of accounting and financial reporting issues related to COVID-19, the CARES Act and PPP loans, accounting and disclosures for the Employee Retention Credit (ERC) and Pass-Through Entity (PTE) tax, and more. 

NASBA QAS - Text - Technical - NASBA Registry - 1995

Chapter 1
Implementing the New Lease Standard - 2022 - ASU 2016-02 Leases (Topic 842) and Other Amendments

• Recognize a key change made to GAAP by the new lease standard
• Identify a type of lease that exists for a lessee under ASU 2016-02
• Recall a type of lease for which the ASU 2016-02 rules do not apply
• Recognize some of the criteria that determine whether a contract is or is not a lease
• Identify how a lessee should account for initial direct costs
• Recall how a lessor should initially account for initial direct costs for a lease in certain instances
• Identify how a lessor should account for lease payments received on the income statement for an operating lease
• Recognize how certain existing leases are accounted for on the implementation date of ASU 2016-02
• Recall the potential impact that the new lease standard might have on a lessee’s EBITDA and debt-equity ratios.

Chapter 2
Accounting and Financial Reporting for COVID-19, the CARES Act and PPP Loans - 2022

• Recognize some types of concentrations that might require disclosure under the risk and uncertainty rules including supply-chain shortages
• Identify the definition of near term
• Recall the frequency in which an entity should test goodwill for impairment
• Recognize some exit and disposal costs
• Recall how to classify business interruption insurance proceeds on the financial statements
• Identify the benchmark used to determine going concern
• Identify a method that can be used to measure variable consideration revenue
• Recognize an example of a construction-type contract
• Identify an advantage of a remote accounting function
• Recall how to adjust a deferred tax account when there is a change in tax law
• Recognize a change made by the CARES Act to the deductibility of interest
• Recognize how to account for PPP loan forgiveness
• Identify how to treat the forgiveness of a PPP loan for tax purposes

Chapter 3
Accounting and Disclosures for the Employee Retention Credit (ERC) and the Pass-Through Entity (PTE) Tax - 2022

Chapter 1 - Implementing the New Lease Standard - 2022 - ASU 2016-02 Leases (Topic 842) and Other Amendments

I.      Background

II.     Basic Concepts of ASU 2016-02

A. General Rules

Review Questions

III.   Scope and Scope Exceptions

IV.   Identifying a Lease

Review Questions

V.    Lessee Rules

A. Lease Classification - Lessee

B. Initial Measurement of Lease- Lessee

C. Lease Modifications - Lessee

D. Lease Payments - Lessee

E. Lease Term and Purchase Options- Lessee

F. Subsequent Reassessment of Lease Elements- Lessee

G. Short-Term Leases - Lessee

H. Subsequent Measurement and Accounting for Leases- Lessee

I.  Other Recognition and Measurement Issues- Lessees

J. Financial Statement Presentation Matters- Lessee

K. Disclosures by Lessees

Review Questions

VI.   Lessor Rules

A. Lease Classification

B. Amendments Made to Lessor Rules Since ASU 2016-02

C. Accounting for Sales-Type Lease- Lessor

D. Accounting for a Direct Financing Lease

E. Accounting for Operating Leases- Lessor

F. Disclosure- Lessor Leases

Review Questions

VII.  Transition and Effective Date Information

A. General- Existing Leases

B. Transition

Review Questions

VIII. Impact of Changes to Lease Accounting

IX.   Impact of Lease Changes on Nonpublic Entities

X.    Other Considerations- Dealing with Financial Covenants

XI.   Avoiding the New Lease Standard

Review Questions

Chapter 2 - Accounting and Financial Reporting for COVID-19, the CARES Act and PPP Loans - 2022

I.      Introduction

II.     Accounting Issues Related to COVID-19

III.   Disclosure of Risks and Uncertainties- COVID-19 and Supply-Chain Shortages

Review Questions

IV.   Asset Impairments- Long-Lived Assets

A. Overview of Asset Impairment Rules

B. Goodwill Impairment Issues

V.    Writedowns and Disclosures of Stock Market Investments

A. Disclosure of Stock Losses After Year End

Review Questions

VI.   Inventory Costs and Valuation Issues

A. GAAP Review of Inventories

VII.  Trade Receivables and the Allowance for Doubtful Accounts

VIII. Exit and Termination Costs

IX.   Contingencies and Exposure to Third-Party and Employee Claims

X.    Business Interruption Insurance Recovery and Presentation

XI.   Going Concern and COVID-19

A. GAAP Requirements- Going Concern

B. Engagement Requirements- Going Concern

C. The One-Year Going Concern Window and COVID-19

D. Use of a Financial Support Letter when there is a Going Concern Issue

Review Questions

XII.  Revenue and Contracts

A. Variable Consideration Revenue

B. Losses on Onerous Contracts- Impact of COVID-19 and Inflation on Unrealized Losses

XIII. Loan Modifications and Covenants

XIV. Remote Accounting Functions – Post COVID

XV. Fraud and the COVID-19 Internal Control Environment

Review Questions

XVI. Income Tax Issues- CARES Act

A. Deferred Tax Assets from NOLs- the CARES Act

B. Limitation on Interest Deduction- the CARES Act

Review Questions

XVII. Accounting for PPP Loans under the CARES Act

A. Introduction

B. Basic Rules for PPP Loans- SBA

C. How Should PPP Loans be Accounted for Under GAAP?

D. Accounting for a PPP Loan as Debt

E. Forgiveness of PPP Loan

F. Tax Effects of PPP Loans

G. Disclosures Required- PPP Loan Treated as Debt

H. Accounting for an Economic Injury Disaster Loan (EIDL)

I.  Other GAAP Approaches for PPP Loans

J. Accountant and Auditor Reporting Issues- PPP Loans

K. Accountant Reporting and Disclosure Issues Peculiar to 2021 First- and Second-Draw PPP Loans

Review Questions

Chapter 3 - Accounting and Disclosures for the Employee Retention Credit (ERC) and the Pass-Through Entity (PTE) Tax - 2022

I.      Introduction

II.     Accounting -Financial Disclosures for the Employee Retention Credit (ERC)

A. Overview

B. GAAP Accounting for the ERC

C. OPTION 1: ASC 958-605- Not-for-Profit Entities: Revenue Recognition

D. OPTION 2: IAS 20, Accounting for Government Grants and Disclosure of Government Assistance

E. Disclosures for the ERC

F. Fixing the 2020 Financial Statements and Disclosures for the ERC

G. Tax-Basis Financial Statements and the ERC

Review Questions

III.   Accounting - Financial Disclosures for the Pass-Through Entity (PTE) Tax

A. Overview

B. Use of the Pass-Through Entity (PTE) Tax Election

C. GAAP Accounting and Disclosures- PTE Tax

D. GAAP Accounting Rules for the PTE Tax

E. GAAP Disclosures for the PTE Tax

F. PTE Tax and Tax-Basis Financial Statements

Review Questions

Chapter 4 - ASU  2016-13 Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments - 2022

I.      Objective

II.     Background

A. Existing GAAP

B. New ASC 326, Financial Instruments- Credit Losses

C. Recent FASB ASUs Targeted at ASC 326’s Credit Losses

III.   Scope of  ASC 326

A. Overall scope

IV.   ASU 2016-13 Amendments

A. General Amendments

B. Financial Statement Presentation of Allowance Balance and Activity

C. New Expected Credit Loss Model

D. Subsequent Measurement -Reporting Changes in Expected Credit Losses

E. Writeoffs and Recoveries of Financial Assets

F. Financial Assets Secured by Collateral

G. Available-For-Sale Debt Securities- Impairment

H. Related-Party Loans

I.  Disclosures

J. Purchased Financial Assets With Credit Deterioration   NEW per ASC 326-10

K. Implementation

L. Examples from ASU 2016-13

Review Questions

Chapter 5 - Current Developments - Accounting and Financial Reporting - 2022

I.      Latest Developments on the Accounting Front

A. Significant GAAP Changes in 2022 and Beyond

B. Significant FASB Disaggregation- Income Statement Expenses Project

C. The Gradual Demise of Company Pension Plans

Review Questions

D. LIFO in a New High-Inflation Environment

E. Recent  Fair Value Accounting Standards

Review Questions

F. Sustainability and ESG Standards Is a Hot Issue

Review Questions

G. Post-Petition Update on Revenue Recognition Standard

H. FASB Move to Amortize Goodwill Again

Review Questions

I.  Miscellaneous Tax Issues for GAAP

J. Accounting, Auditing and Tax Issues Related to Marijuana

K. Order of Placement of Financial Statements

L. Risk of Unrecorded Sales Tax Liabilities- Wayfair Decision

Review Questions

Chapter 6 - Selected Accounting Standards Updates (ASUs) - 2022

I.      Accounting Standards Updates (ASUs)

A. Selected Accounting Standards Updates (ASUs)

ASU 2021-03: Intangibles—Goodwill and Other (Topic 350), Accounting Alternative for Evaluating Triggering Events

ASU  2019-12: Income Taxes (Topic 740)- Simplifying the Accounting for Income Taxes

ASU 2018-17: Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities

Review Questions

Glossary