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

Exam Questions: 20
Course Level: Overview/Basic
Pages: 136 | Content: 132, Supplemental: 4
NASBA Area of Study: Accounting and Auditing
Not Acceptable for: Enrolled Agents
Version: 7970A

The objective of this course is to review the impact that COVID-19 has on accounting and financial reporting, 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; collectibility 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. Updated to Reflect Accounting and Reporting Issues to the Consolidated Appropriations Act, 2021. PLEASE NOTE: Not accepted for Enrolled Agents. All course material provided. No prerequisites. Course level: Basic/Overview.

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Course Information

Table of Contents
  • Introduction
  • Accounting and Auditing Issues Related to COVID-19
  • Disclosure of Risks and Uncertainties
  • Asset Impairments - Long-Lived Assets
  • Writedowns and Disclosures of Stock Market Investments
  • Inventory Costs and Valuation Issues
  • Trade Receivables and the Allowance for Doubtful Accounts
  • Exit and Termination Costs
  • Contingencies and Exposure to Third-Party and Employee Claims
  • Business Interruption Insurance Recovery and Presentation
  • Going Concern and COVID-19
  • Funded Status Deterioration - Multi-Employer Plan Obligations
  • Revenue and Contracts
  • Loan Modifications and Covenants
  • Impact of Lower Interest Rates on Lease Obligations
  • Auditing and Review Engagement Issues - COVID-19
  • Income Tax Issues - CARES Act
  • Accounting for PPP Loans Under the CARES Act
Objectives
  • To recognize some types of concentrations that might require disclosure under the risk and uncertainty rules
  • To identify the definition of near term
  • To recall the frequency in which an entity should test goodwill for impairment
  • To recognize some exit and disposal costs
  • To recall how to classify business interruption insurance proceeds on the financial statements
  • To identify the benchmarks used to determine going concern
  • To recognize how to report going concern
  • To identify a method that can be used to measure variable consideration revenue
  • To recognize an example of a construction-type contract
  • To identify an advantage of remote auditing
  • To recall how to present debt issuance costs in the financial statements
  • To recognize how to account for PPP loan forgiveness
  • To identify how to treat the forgiveness of a PPP loan for tax purposes
  • To identify an example of a circumstance in which an emphasis-of-matter paragraph might be necessary

PLEASE NOTE: CPE credit measurement is based on NASBA Registry and QAS guidelines of one credit for every 50 minutes. Credit calculation may vary in different states — check with your State Board of Accountancy. Unless otherwise noted in the specific course description, no advanced preparation is required in order to register or complete any PES CPE course. Use of materials or services provided by Professional Education Services, LP ("PES") are governed by the Terms and Conditions stated on PES' website www.mypescpe.com. PES provides these courses with the understanding that it is not providing any accounting, legal, or other professional advice and assumes no liability whatsoever in connection with its use. PES has used diligent efforts to provide quality information and material to its customers, but does not warrant or guarantee the accuracy, timeliness, completeness, or currency of the information contained herein. Ultimately, the responsibility to comply with applicable legal requirements falls solely upon the individual licensee, not PES. PES encourages you to contact your state Board for the latest information and to confirm or clarify any questions or concerns you have regarding your duties or obligations as a licensed professional.