CARES Act & other relief for COVID-19

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. It is the third COVID-19-focused relief package and by far the largest in terms of scope and cost. In June and December, two additional COVID-19 relief bills were enacted into law.

Applicability

• All companies that report under US GAAP

Relevant dates

• CARES Act was signed into law on March 27, 2020
• Paycheck Protection Program Flexibility Act was signed into law on June 5, 2020
• Consolidated Appropriations Act, 2021 was signed into law December 27, 2020
• Effective immediately

Key impacts

• The CARES Act and subsequent COVID-19 related relief include many provisions that could significantly affect the financial reporting of companies applying US GAAP.
• The changes in law are, in general, recognized events for annual and interim reporting periods ending on or after their respective enactment dates, and a nonrecognized subsequent event for annual and interim reporting periods ending before that date.
• KPMG addresses the primary accounting and reporting impacts of the relief provisions as we currently understand them.

Report contents

• Background
• Applicability
• Key impacts
• Income taxes
• Employee retention credit and payroll taxes
• Paycheck protection program
• Government grants and payments for goods and services
• Debt and equity instruments issued
• Deferral of credit impairment guidance, and suspension of troubled debt restructuring guidance
• Mortgage relief
• Lease eviction moratoriums
• Subsequent events and going concern