Accounting and Financial Reporting for COVID-19, the CARES Act and PPP Loans - 2021 Edition (4 hour version) (Course Id 1768)

Accounting - Accounting for Course Id 1768

The objective 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 including accounting for Paycheck Protection Program (PPP) loans and forgiveness.

Topics include: Disclosures of 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 CARES Act, the course discusses the accounting for PPP loans and forgiveness, accounting for tax changes made by the CARES Act, and more.

NASBA QAS - Text - Technical - NASBA Registry - 1768

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
• 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
• Recall how to present debt issuance costs in the financial statements
• Recognize how to account for PPP loan forgiveness
• Identify how to treat the forgiveness of a PPP loan for tax purposes, and
• Identify an example of a circumstance in which an emphasis-of-matter paragraph might be necessary.

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

I.      Introduction

II.     Accounting and Auditing Issues Related to COVID-19

III.   Disclosure of Risks and Uncertainties

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

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.    Auditing and Review Engagement Requirements- Going Concern

Review Questions

XII.  Funded Status Deterioration- Multi-Employer Plan Obligations

XIII. Revenue and Contracts

A.    Variable Consideration Revenue

B.    Losses on Onerous Contracts

XIV. Loan Modifications and Covenants

XV. Impact of Lower Interest Rates on Lease Obligations

XVI. 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

XVII. Income Tax Issues- CARES Act

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

B.    Deferred Tax Assets from NOLs- the CARES Act

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

Review Questions

XVIII. 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

Review Questions

Glossary