Accounting and Financial Reporting for COVID-19 and the CARES Act (4 hour version) (Course Id 1645)

Accounting - Accounting for Course Id 1645

The purpose of this course is to review the accounting and financial reporting impacts of the economic crisis created by the coronavirus (COVID-19), and the changes made by the 2020 CARES Act.

Topics include: Disclosures of subsequent events and risks and uncertainties; going-concern reporting and disclosure issues; impairment issues related to goodwill and other long-lived assets; 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, and accounting and auditing engagement matters.  With respect to the 2020 CARES Act, the course discusses the accounting for Paycheck Protection Plan (PPP) loans,  accounting for tax changes made by the CARES Act, and more. 

NASBA QAS - Text - Technical - NASBA Registry - 1645

Course Learning Objectives

• Identify types of subsequent events that require disclosure
• 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 the formula for testing goodwill 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
• 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, and
• Recognize how a company should present CARES Act loan forgiveness on its financial statements.

Chapter 1 - Accounting and Financial Reporting for COVID-19 and the CARES Act

I.          Introduction

II.         Accounting and Auditing Issues Related to the Coronavirus (COVID-19)

III.        Subsequent Events: ASC 855, Subsequent  Events

IV.        Disclosure of Risks and Uncertainties

Review Questions

V.         Asset Impairments- Long-Lived Assets

A.         Goodwill impairment issues

B.         Indefinite Lived Intangible Assets- Impairment

C.         Finite Lived Intangible Assets- Impairment

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

E.         Ordering  of Impairment Tests

VI.       Writedowns and Disclosures of Stock Market Investments

A.        Disclosure of Stock Losses

B.        Impairment Losses- Investments in Certain Equities and Debt Securities

C.        Impairment Test- Equity Securities Without a Readily Determinable Fair Value

D.        Impairment Test- Debt Securities  Available for Sale and Held to Maturity

Review Questions

VII.      Inventory Costs and Valuation Issues

A.        Overview

B.        GAAP Review of Inventories

VIII.    Trade Receivables and the Allowance for Doubtful Accounts

IX.      Exit and Termination Costs

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

XI.      Business Interruption Insurance Recovery and Presentation

XII.     Going Concern and COVID-19

A.        GAAP Requirements- Going Concern

B.        Auditing and Review Engagement Requirements- Going Concern

Review Questions

XIII.    Funded Status Deterioration- Multi-Employer Plan Obligations

XIV.    Revenue and Contracts

A.        Variable Consideration Revenue

B.        Losses on Onerous Contracts

XV.     Loan Modifications and Covenants

XVI.    Impact of Lower Interest Rates on Lease Obligations

XVII.   Auditing and Review Engagement Issues- COVID- 19

A.        Accounts Receivable Confirmations

B.        Physical Inventory Observations

C.        Emphasis-of-Matter Paragraph- COVID-19

D.        Remote Auditing

Review Questions

XVIII.  Income Tax Issues- CARES Act

A.        Tax Rate for Deferred Income Taxes under the 2020 CARES Act

B.        Deferred Income Tax Assets from NOLs- the 2020 CARES Act

C.        New 50% Limitation on Interest Deduction- the 2020 CARES Act

XIX.    Accounting for CARES Act Loans- Paycheck Protection Program

Review Questions

Glossary