As entities consider the effects of COVID-19 on their global operations, consideration is needed in understanding the accounting implications of these developments. The many ramifications of the COVID-19 pandemic, and an entity’s response to these changes, may impact an entity’s determination of income tax accounting and related estimates in a variety of areas.
President Trump signed into law the CARES Act on March 27, 2020, making this a Q1 event for calendar year companies. ASC 740 requires that an entity must recognize the effect of a change in tax law or rates in the period that includes the date of enactment. The business provisions in the CARES Act need to be analyzed and the estimated impact of those provisions recorded as part of continuing operations during the quarter.
This course will provide a high level overview of the basic concepts of ASC 740, but we will go further and discuss the impact of the pandemic and the CARES Act on Accounting for Income Based on Taxes, specifically deferred tax assets and deferred tax liabilities.
This will be the first in a two part series that examines the basics of ASC 740 and how the COVID pandemic has impacted the accounting process.
Publication Date: December 2020
Designed For
Business owners and operational professionals, Accountants and Finance professionals and Internal auditors, and Tax and Legal professionals.
Topics Covered
- Overview of issues related to COVID impact on ASC 740
- The scope of ASC 740 and types of taxes included
- Differentiate between temporary and permanent differences
- Differentiate between accounting estimates and errors and related COVID impacts
- Components of changes in tax rates, interim tax rates and related COVID implications
- How to account for uncertainty in income taxes and the impact of COVID
Learning Objectives
- Identify issues related to COVID impact on ASC 740
- Identify the scope of ASC 740 and types of taxes included
- Describe the objectives and basic principles of ASC 740 while recognizing how to define a tax based on income during the COVID pandemic
- Differentiate between temporary and permanent differences
- Recognize how to evaluate impact of COVID 19 on each component
- Differentiate between accounting estimates and errors and related COVID impacts
- Recognize how to examine components of changes in tax rates, interim tax rates and related COVID implications
- Identify how to account for uncertainty in income taxes and the impact of COVID
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Accounting (2 hours)
Program Prerequisites
None
Advance Preparation
None
Instructor
Lynn Fountain
Lynn Fountain has over 38 years of experience spanning public accounting, corporate accounting and consulting. 20 years of her experience has been working in the areas of internal and external auditing and risk management. She is a subject matter expert in multiple fields including internal audit, ethics, fraud evaluations, Sarbanes-Oxley, enterprise risk management, governance, financial management and compliance. Lynn has held two Chief Audit Executive (CAE) positions for international companies. In one of her roles as CAE, she assisted in the investigation of a multi-million-dollar fraud scheme perpetrated by a vendor that spanned 7 years and implicated 20 employees. The fraud was formally investigation by the FBI and resulted in 5 indictments estimating a $13M fraud loss.
Ms. Fountain is currently engaged in her own consulting and training practice. She is a highly sought-after trainer and international speaker. In addition, Ms. Fountain has assisted numerous companies with enterprise risk management frameworks, internal audit processes and financial accounting. She also serves as a discussion leader for the AICPA for numerous classes finance, accounting and risk management topics.
Ms. Fountain is the author of three separate technical books. Her first book released in 2015 by the Institute of Internal Auditors Foundation is entitled “Raise the Red Flag – The Internal Auditors Guide to Fraud Evaluations”. Her second book “Leading the Internal Audit Function” was released in October 2015 by Taylor & Francis Publications. This book serves as the initial launch for a series of leading practice internal audit and information technology publications. Her third book “Ethics and the Internal Auditor’s Dilemma” was released in December 2016.
Ms. Fountain obtained her BSBA from Pittsburg State University and her MBA from Washburn University in Kansas. She has her CPA, CGMA, CRMA credentials.