Financial Reporting and Regulatory Update

Fourth Quarter 2020

From the AICPA

Resource sites for coronavirus, Paycheck Protection Program

The AICPA coronavirus resource center webpage is designed to help the accounting profession stay up to date on matters affected by COVID-19. The site offers information on:

  • CARES Act news and resources
  • COVID-19 resources addressing audit and assurance, accounting and reporting, technology, and tax, among other topics
  • Advocacy and tax relief matters
  • Virtual and other learning opportunities

In addition, the AICPA has a separate Small Business Administration (SBA) Paycheck Protection Program resources webpage, which brings together many different resources including loan forgiveness information and frequently asked questions. From this resources page, users can link to additional information on the newly released loan necessity questionnaires that were provided to lenders by the SBA for distribution to borrowers. The two new forms for borrowers with loans greater than $2 million are SBA Form 3509, “Loan Necessity Questionnaire (For-Profit Borrowers),” and SBA Form 3510, “Loan Necessity Questionnaire (Non-Profit Borrowers).” According to each form, each borrower, including its affiliates, that received PPP loans with an original principal amount of $2 million or greater is required to complete the form and submit it, with the required supporting documents, to the lender servicing the loan. The form is sent by the lender to the borrower. The borrower has 10 business days to submit the completed form to the lender. Both questionnaires are nine pages and cover borrower information, business or non-profit activity assessments, and liquidity assessments.

Digital assets practice aid

To address the quickly evolving ecosystem of digital assets, the AICPA released, on Oct. 8, 2020, an updated practice aid, “Accounting for and Auditing of Digital Assets,” adding 13 new questions and answers to the aid originally issued in December 2019.

The practice aid provides nonauthoritative guidance for financial statement preparers and auditors on accounting and auditing under GAAP and generally accepted auditing standards for digital assets, which are defined broadly as “digital records that are made using cryptography for verification and security purposes, on a distributed ledger.”

The new questions and answers address the following areas:

  • Meeting the definition of an investment company when engaging in digital asset activities
  • Accounting by an investment company for digital assets it holds as an investment
  • Recognition, measurement, and presentation of digital assets specific to broker-dealers
  • Considerations for crypto assets that require fair value measurement
  • Accounting for stablecoin holdings