Pandemic accounting: How to make the right judgments

November 1, 2020

By Ken Tysiac, Journal of Accountancy

The coronavirus pandemic has led to numerous financial reporting challenges for CPAs that didn't seem to have easy answers in U.S. GAAP.

Although the foundational rules for U.S. financial reporting were designed to be applied across a wide range of occurrences, it would have been difficult for any standard setter to envision the number of lease concessions caused by the pandemic or the intricacies and often-changing rules associated with Paycheck Protection Program (PPP) loans.

Through various means that have included FASB staff Q&As, AICPA Technical Questions and Answers, and a GASB technical bulletin, standard setters and experts have developed guidance designed to help CPAs and others navigate the accounting challenges posed by the pandemic. In some cases, effective dates were changed as well (see the sidebar, "Virus Leads to Effective Date Changes").

As the fiscal year end approaches for companies that are on a calendar-year reporting schedule, here are answers to some of the year's most challenging pandemic-related financial reporting questions. (Unless otherwise noted, the text refers to for-profit and not-for-profit entities.)

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