COVID-19

Thursday, 25 June 2020

CARES Act Impact on Retirement Plans

Written by Samantha Brege

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...

Published in COVID-19
Thursday, 25 June 2020

Charitable giving in a time of crisis

Written by Thomson Reuters

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...

Monday, 15 June 2020

How Cannabis Businesses Can Turn to Payroll Tax Deferral for Financial Relief

Written by Chris Sing, CPA, CGMA, MBA

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...

Published in COVID-19
Tuesday, 09 June 2020

ALLL Trends Due To CECL Implementation and COVID-19

Written by The Rehmann Team

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...

Monday, 08 June 2020

President signs bill that provides more PPP flexibility

Written by Thomson Reuters

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...

Published in COVID-19

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...

Published in COVID-19

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...

Tuesday, 02 June 2020

COVID-19 relief: Short-term loan modifications aren’t TDRs

Written by Thomson Reuters

During the novel coronavirus (COVID-19) crisis, financial institutions may be working with struggling borrowers on loan modifications. A group of financial institution regulatory agencies, after consulting with the Financial Accounting Standards Board (FASB), has issued a joint statement. The guidance confirms that, for borrowers that are current on their loan payments, short-term modifications due to the COVID-19 pandemic won’t be considered troubled debt restructurings (TDRs). The statement is also consistent with a related provision of the Coronavirus Aid, Relief, and Economic Security (CARES) Act...

The task of processing Paycheck Protection Program (PPP) loans is a high priority for financial institutions right now. Following are some items to consider when accounting for these loans. Loan Disbursement and Receipt of Fees At the time funds are disbursed to the borrower, the financial institution should record the loan to the borrower, as well as a receivable from the Small Business Administration for the processing fee. The legally-binding PPP loan receivable will be repaid either by the borrower or through the SBA via loan forgiveness...

Published in COVID-19
Monday, 18 May 2020

More COVID-19 relief: FASB to defer implementation deadlines

Written by Thomson Reuters

During the novel coronavirus (COVID-19) pandemic, many businesses are, at best, facing unprecedented operational challenges and, at worst, struggling to avoid bankruptcy. In such dire circumstances, the last thing management wants to think about is updating the company’s systems and records to comply with new accounting rules. Fortunately, the Financial Accounting Standards Board (FASB) has unanimously decided to propose one-year deferrals of the updated revenue recognition and leases standards for certain entities, including specific types of businesses and nonprofits. Here are the details...

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