AICPA Issued Technical Q&A for CARES Act Accounting
The AICPA has issued a Technical Q&A to provide guidance on how nongovernmental entities should account for monies received under the CARES Act. The Q&A addresses questions related to how to account for the forgiveable portion of the PPP loans. GASB has issued a separate exposure draft addressing accounting for governmental entities.
GASB Proposes Application Guidance on CARES Act
GASB has issued an exposure draft, Accounting and Financial Reporting Issues Related to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) of 2020 and Coronavirus Diseases, to address questions relating to the proper accounting for CARES Act funding including PPP. The Q&A addresses questions about whether this would be treated as an extraordinary or special item, as operating or nonoperating revenue and when does a forgivable loan become revenue. Comments are due June 25th.
Revisions to the Uniform Accountancy Act’s Model Rules
The National Association of State Boards of Accountancy (NASBA) has proposed revisions to the Uniform Accountancy Act (UAA) Model Rules. The AICPA has already approved CPA Evolution and thus now changes are needed to the UAA. The proposed revisions make changes to the educational requirements for sitting for the CPA exam. Changes include a focus on professional skepticism as well as data analytics. The goal is to encourage uniformity between states for licensure. Comments are due August 31, 2020.
Yellow Book CPE – COVID Update
GAO has issued an alert addressing COVID and Yellow Book CPE requirements. More rules being relaxed. It does NOT change CPE requirements for any other organizations. The relaxation of CPE is intended to be responsive to the cancellations of many CPE events due to COVID19.
FASB Delays Leases & Revenue Recognition
FASB voted to delay both revenue recognition and leases for private entities at their May 20th meeting. The original proposal was for a delay for private company franchisors to receive a one year delay of revenue recognition. But the Board added all private entities that have not yet issued financials. In addition, both “public” and private nonprofits as well as all private entities receive an extra year (in addition to ASU 2019-10) for leases. ASU to be issued in June!
PEEC Delays and Exposure Draft
The AICPA’s Professional Ethics Executive Committee (PEEC) delayed 3 interpretations at its May meeting. In addition, it has issued an exposure draft addressing record requests and updates the interpretation regarding acts discreditable. Comments are due September 30th.
Peer Review Provides COVID Delays
This week the Peer Review Board of the AICPA voted to grant a six-month extensions for peer reviews, corrective actions, and implementation plans that had original due dates between January 1 and September 30, 2020. The delays, consistent with other standard setters, are trying to assist firms who are struggling with COVID19. As firms assist clients with obtaining assistance and work to audit in a remote environment, the delay is to provide relief. The additional six months is optional and if a firm and the reviewer are ready and able, they can continue as scheduled. The extension is automatic and does not have to be requested.
FASB Effective Date Delays for Certain Entities
FASB has proposed a one year delay of revenue recognition for private company franchisors. In addition, public and nonpublic nonprofits will receive a delay along with nonpublic entities. The delay is due to the operational issues associated with COVID19. Originally, nonprofits with conduit debt were scheduled to adopt leases with public business entities but have now been granted a one year delay as many of these entities are hospitals and universities who are most impacted by COVID19.
Disclaimer: The information contained within this blog is provided for informational purposes only. Viewing this material does not qualify for CPE credit. Additionally, this general knowledge is not intended to substitute for obtaining accounting, legal, or financial advice from a professional accountant with specific knowledge of your organization. Finally, watching this blog and/or subscribing to the newsletter do not create an accountant-client relationship.
