Accounting and Financial Reporting in a Post-COVID Economy (4 hour version) (Course Id 2093)

The objective of this course is to address the accounting and financial reporting for the current post-COVID economic climate including the effects of inflation, supply-chains, rising interest rates, and other events on company financial statements for 2023 and 2024.

Topics include: Disclosures of risks and uncertainties related to supply-chain concentrations; going-concern reporting and disclosure issues; impairment issues related to goodwill and real estate; accounting for variable consideration revenue and onerous contracts;  dealing with inventory costs and stock market investment losses; collectability of trade receivables; exit and termination benefit obligations; contingencies, use of LIFO; and accounting and auditing engagement matters.  The course also discusses the accounting for selected tax changes affecting 2023 and 2024 financial statements.

NASBA QAS - Text - NASBA Registry - 2093

Course Learning Objectives

• Recognize some types of concentrations that might require disclosure under the risk and uncertainty rules
• 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
• Recognize the relationship of a change in interest rates on real estate values
• Identify the benchmark used to determine going concern
• Recognize how to report on going concern in an audit
• Identify a method that can be used to measure variable consideration revenue
• Recognize an example of a construction-type contract
• Identify an advantage of remote auditing
• Identify whether the LIFO IPIC approach is acceptable for GAAP
• Recall the net operating loss rules

Chapter 1 - Accounting and Financial Reporting in a Post-COVID Economy

I.      Introduction

II.    Accounting and Auditing Issues Related to the Post-COVID Economy

III.   Disclosure of Risks and Uncertainties- Supply-Chain Concentrations

Review Questions

IV.   Asset Impairments- Long-Lived Assets- 2023 and 2024 Issues

A.    Long-Lived Tangible Assets- Real Estate and Equipment Impairment

B.    Goodwill impairment issues

C.    Ordering  of Impairment Tests

V.    Writedowns, Writeups and Disclosures of Stock Market and Bond Investments

A.    Debt Securities- Unrealized Losses in 2022 and Unrealized Gains in 2023

B.    Equity Securities- Unrealized Gains in 2023

C.    Disclosure of Stock and Debt Investment Losses After Year End

Review Questions

VI.   Inventory Costs and Valuation Issues

A.    GAAP’s Lower of Cost and Net Realizable Value for FIFO and Average Cost Inventories

B.    Impact of Capacity on GAAP Inventory Valuations

VII. Trade Receivables and the Allowance for Doubtful Accounts

VIII. Exit and Termination Costs

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

X.    Business Interruption Insurance Recovery and Presentation- Post-COVID Damage

XI.   Going Concern in  the 2023-2024 Inflationary Economy

A.    GAAP Requirements- Going Concern

B.    Auditing and Review Engagement Requirements- Going Concern

Review Questions

XII.  Joint and Several Risk- Multi-Employer Plan Obligations

XIII. Revenue and Contracts

A.    Variable Consideration Revenue

B.    Losses on Onerous Contracts- Impact of Inflation on Unrealized Losses

XIV. Loan Modifications and Covenants in Light of Higher Interest Rates

XV.  Remote Engagements

A.    Remote Audits in 2023 and 2024

B.    Accounts Receivable Confirmations

C.    Physical Inventory Observations

D.    Employee Fraud and the Current Internal Control Environment

XVI. LIFO in a New High-Inflation Environment

Review Questions

XVII. GAAP Income Tax Issues- 2023 and 2024

A.    NOL Carryforwards and Deferred Tax Assets

B.    Higher Interest Rates and the Limitation on Interest Deduction-2023 and 2024

Review Questions

Glossary