COVID-19

The COVID-19 crisis has dramatically altered the business world, creating new risks, uncertainties and, in some cases, opportunities. What are audit committee chairs most concerned about during these unprecedented times? Ongoing outreach project Each year, the Public Company Accounting Oversight Committee (PCAOB) actively reaches out to capital market participants to identify critical issues that audit committees are dealing with. In 2019, during PCAOB audit inspections, nearly 400 audit committee chairs of U...

Whether the tumultuous events of 2020 led to you closing your shop doors temporarily, or your business remains open with a reduced workforce, or you’ve pivoted operations to something else entirely, you’re likely contemplating how to lock in the long-term success of your business. We face a long journey of recovery ahead. But we’re all striving to find productive ways of settling into our new reality. Now is the time to not only renew, restart and rebuild, but also re-imagine all that can be...

Prudent risk management and consumer protection principles are topics covered in a joint statement released on Aug. 3, 2020 by the Federal Financial Institutions Examination Council. The joint statement provides this guidance as financial institutions work with borrowers on the continuation loan accommodations that will likely be needed throughout the ongoing economic crisis. Accommodations outlined in this interagency statement include: agreement to defer one or more payments, making a partial payment, forbear any delinquent amounts, modify a loan or contract or provide other assistance or relief to a borrower who is experiencing a financial challenge Prudent risk management The statement addresses the need for institutions to further apply “prudent accommodation options” for their borrowers...

The IRS released that anyone who already took a required minimum distribution (RMD) in 2020 from certain retirement accounts now has the opportunity to roll those funds back into a retirement account following the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act RMD waiver for 2020. The 60-day rollover period for any RMDs already taken this year has been extended to August 31, 2020, to give taxpayers time to take advantage of this opportunity. Read more from the IRS on Notice 2020-51. Additionally IRS Notice 2020-50, released June 19, 2020, provided additional guidance on Coronavirus Related Distributions and Loans from Retirement Plans under the CARES Act...

The sudden and severe impact of the novel coronavirus (COVID-19) pandemic has created much financial stress, but the crisis has also generated an intense need for charitable action. If you’re able to continue donating during this difficult period, the Coronavirus Aid, Relief, and Economic Security (CARES) Act may make it a little easier for you to do so, whether you’re a small or large donor. Tax benefits From an income tax perspective, the CARES Act has expanded charitable contribution deductions. Individual taxpayers who don’t itemize can take advantage of a new above-the-line $300 deduction for cash contributions to qualified charities in 2020...

Unlike other businesses that secured federal financial relief during the pandemic, state-legal medical and recreational cannabis businesses found themselves out of luck given they’re unable to qualify for the Paycheck Protection Program loans provided through the Coronavirus Aid, Relief, and Economic Security (CARES) Act. These businesses don’t qualify for the federal assistance because they are engaged in “federally illegal” activities – applicants applying for the federal loans must certify, under penalty of perjury, that they are not engaged in “illegal” activity. As frustrating as this has been for the cannabis industry, which is managing pandemic challenges much like other industries, one form of relief – deferral of employment tax payments – is available to these businesses. Working Capital Cash Savings Under the CARES Act, employers can defer the payment of the employer share of taxes, which is a mandatory employment tax both employees and employers pay...

The largest U.S. banks reported weak first-quarter 2020 earnings, with a median decline of 33%, a trend expected to continue at least into the second quarter and possibly beyond, according to a May 2020 report from S&P Global. This was largely due to buildups in ALLL based on downtrends in economic predictions and adoption of CECL accounting methods, coupled with fewer net charge-offs...

On June 5, President Trump signed he Paycheck Protection Program (PPP) Flexibility Act (PPPFA) of 2020 (H.R. 7010) which provides more flexibility for participants in the PPP program, including allowing those participants to defer the payment of certain payroll taxes that the CARES Act prevented them from deferring. Background...

Effective June 8, 2020 The Federal Reserve Board on Monday expanded its Main Street Lending Program to allow more small and medium-sized businesses to be able to receive support. The Board lowered the minimum loan amount, raised the maximum loan limit, adjusted the principal repayment schedule to begin after two years, and extended the term to five years, providing borrowers with greater flexibility in repaying the loans. The Board expects the Main Street program to be open for lender registration soon and to be actively buying loans shortly afterwards. "Supporting small and mid-sized businesses so they are ready to reopen and rehire workers will help foster a broad-based economic recovery," Federal Reserve Chair Jerome H...

In response to the novel coronavirus (COVID-19) crisis, the implementation deadlines have been deferred for the updated accounting rules on current expected credit losses (CECL), revenue recognition and leases. But those deferrals apply only to certain entities. In particular, the CECL deferral excludes publicly traded insurers, credit card companies and auto lenders. Now these overlooked creditors are asking the Financial Accounting Standards Board (FASB) to extend them the same relief...