GASB offers guidance on CARES Act and coronavirus
The Governmental Accounting Standards Board released a technical bulletin with guidance for applying existing GASB standards to transactions related to the CARES Act and outflows incurred in response to the COVID-19 pandemic. It answers some of the questions raised by GASB stakeholders, especially state and local governments.
Technical Bulletin 2020-1, Accounting and Financial Reporting Issues Related to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and Coronavirus Diseases, clarifies the application of GASB’s existing recognition requirements to resources received from certain programs established by the CARES Act.
The bulletin also explains how the existing presentation requirements apply to some inflows of CARES Act resources and to the unplanned and additional outflows of resources incurred in response to the coronavirus disease.
State and local governments are dealing with considerable losses of revenue in the midst of the widening pandemic. That has prompted questions about how to apply some of GASB's standards about matters such as revenue recognition, government aid, the impact on health care facilities, loans provided through the Paycheck Protection Program, and whether actions taken to slow the spread of the virus and implement stay-at-home orders would be considered "extraordinary items" or "special items" for accounting purposes.