GASB Releases Proposes Technical Guidance on CARES Act Aid

By:
Chris Gaetano
Published Date:
Jun 12, 2020
The Governmental Accounting Standards Board (GASB) has released proposed technical guidance on how entities should account for aid under the CARES Act. Specifically the guidance addresses the three provisions that pertain to GASB standards: the $150 billion Coronavirus Relief Fund (CRF), which went to states, tribal governments and certain eligible local governments for public health expenses; the $175 billion provider relief fund, which aids hospitals and health care organizations; and the Paycheck Protection Program (PPP). It goes over: 

* When an entity should recognize funds from the CRF as revenue;
* Whether a CARES Act provision that addresses a government’s loss of revenue should be considered an eligibility requirement, for purposes of revenue recognition;
* Whether amendments to the CARES Act enacted after the statement of net position should be considered a nonrecognized subsequent event;
* Whether PPP loans should be considered a liability if the entity expects it to be forgiven;
* How resources should be reported when directed to a business-like activity or enterprise fund; and
* If steps taken to prevent the spread of the virus should be counted as extraordinary items.

Stakeholders have until June 25 to comment; the GASB expects to issue a final technical bulletin by June 30.

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