When organizations are financially struggling or affected by external events, several accounting considerations come into play. External events arising from the COVID-19 pandemic and its disruption could intersect with several components of accounting. A brief summary of possible considerations are described below.
Topics: goodwill impairment, going concern, income tax accounting, Revenue recognition, COVID19, Coronavirus, financial statement disclosures, SEC, PPP Loan, Payment Protection Program, credit loss
On March 27, 2020 President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Some portions of the CARES Act will affect the accounting for income taxes, however some items will not. For example, if a company applies for a small business loan to be used to fund payroll for employees, this loan, and the subsequent forgiveness of the loan may be accounted for as a government grant and do not have an impact on the income tax accounting.
Topics: income tax accounting, NOLs, COVID19, Coronavirus, CARES Act, Coronavirus Aid, Relief, and Economic Security Act, alternative minimum tax
The Financial Accounting Standards Board (FASB) recently proposed changes to income tax reporting. The Board released an exposure draft on January 22, 2015, that affects Income Taxes (Topic 740) for intra-entity asset transfer and the balance sheet classification of deferred income taxes.
Changes in the updates are designed to streamline current practices and simplify financial reporting requirements. The FASB accepted comments on both of the proposed updates through May 29, 2015. As proposed, the new standards would first be implemented for calendar years ending December 31, 2017, and interim periods within those years.
Topics: FASB, income tax accounting, Financial Accounting Standards Board, Income Tax
