We are pleased to release MaloneBailey's May 2020 issue of The Crunch, our newsletter highlighting recent accounting, regulatory and tax updates. Please note that the updates provided in this newsletter are not a comprehensive list. We encourage you to visit the SEC ,  FASB   and   IRS   websites for more information as well as a complete list of updated rules, regulations and proposals.  We invite you to   contact us   should you have any questions about the information provided in this issue.  Please visit our website to review   archived versions   of this newsletter containing past accounting, regulatory and tax updates. The MaloneBailey Team www.malonebailey.com

What's the Crunch? COVID-19 Related Updates Credit Losses – IASB Releases Guidance on Application of IFRS 9 During Time of Uncertainty Due to COVID-19 Pandemic  Audit Matters – AICPA Issues FAQs on Audit Matters and Auditor Reporting Related to COVID-19  SEC Staff Speech, Staff Guidance for Conducting Shareholder Meetings in Light of COVID-19 Concerns  SEC Staff Speech, Statement on the Importance of High-Quality Financial Reporting in Light of the Significant Impacts of COVID-19 by Sagar Teotia, Acting Chief Accountant, Office of the Chief Accountant  SEC Staff Speech, Staff Statement Regarding Rule 302(b) of Regulation S-T in Light of COVID-19 Concerns  SEC Staff Speech, Topic No. 9: Coronavirus (COVID-19)  SEC Staff Speech, SEC Staff Provides Guidance to Promote Continued Shareholder Engagement, Including at Virtual Annual Meetings, for Companies and Funds Affected by the Coronavirus Disease 2019 (COVID-19)  Exchange Act Rules – SEC Staff Updates Compliance and Disclosure Interpretation Featured Article & Podcast SEC Adopts Amendments to Reduce Unnecessary Burdens on Smaller Issuers by More Appropriately Tailoring the Accelerated and Large Accelerated Filer Definitions Recent Accounting & Regulatory Updates Recent FASB & AICPA Updates FASB Accounting Standards Updates - No. 2020-04 —Reference Rate Reform (Topic 848) —Facilitation of the Effects of Reference Rate Reform on Financial Reporting Financial Instruments – FASB Discusses Credit Losses Implementation  Insurance Entities – AICPA Seeks Feedback on Insurance Entities Working Drafts Business Acquisitions – IASB Consults on Improving Reporting on Business Acquisitions and Goodwill Accounting  Leases and Revenue Recognition – FASB to Propose Delay in Effective Dates for Private Companies  Recent SEC & PCAOB Updates Release No. 33-10771: Securities Offering Reform for Closed-End Investment Companies  Release No. 34-88365: Amendments to the Accelerated Filer and Large Accelerated Filer Definitions Auditing Updates SOC for Supply Chain – New Edition of AICPA Audit and Accounting Guide Published  Auditor Reporting – AICPA Releases SAS 140 to Complete Project to Conform GAAS with Reporting Provisions in SAS 134  Auditing Standards – ASB to Vote to Extend Effective Dates Tax Updates  Filing Deadlines Postponed to Serve as Relief for COVID-19 Pandemic Extra Crunch MaloneBailey Hosts Virtual Webinar on April 7, 2020: The CARES Act - Your Complete Guide About MaloneBailey, LLP

COVID-19 Related Updates

Credit Losses – IASB Releases Guidance on Application of IFRS 9 During Time of Uncertainty Due to COVID-19 Pandemic  Summary - The International Accounting Standards Board (IASB) has released the document, IFRS 9 and COVID-19—Accounting for Expected Credit Losses Applying IFRS 9 Financial Instruments in the Light of Current Uncertainty Resulting from the COVID-19 Pandemic. The document responds to questions regarding the application of International Financial Reporting Standard (IFRS) 9, Financial Instruments, during this period of enhanced economic uncertainty arising from the COVID-19 pandemic. The document was prepared for educational purposes, highlighting requirements within IFRS 9 that are relevant for companies considering how the pandemic affects their accounting for expected credit losses (ECL). It does not change, remove nor add to, the requirements in IFRS 9. The IASB intends it to support the consistent and robust application of IFRS 9. The IASB developed IFRS 9 in response to requests by the G20 and others to provide more forward-looking information about loan losses than the predecessor Standard and to give transparent and timely information about changes in credit risk. The document acknowledges that estimating ECL on financial instruments is challenging in the current circumstances and highlights the importance of companies using all reasonable and supportable information available, historic, current and forward-looking to the extent possible, when determining whether lifetime losses should be recognized on loans and in measuring ECL.  The document reinforces that IFRS 9 requires judgment in application and does not provide bright lines nor a mechanistic approach in accounting for ECLs. Accordingly, companies may need to adjust their approaches to forecasting and determining when lifetime losses should be recognized to reflect the current environment. The IFRS Foundation and the IASB continue to work in close cooperation with regulators and others regarding the application of IFRS 9, and the document encourages companies to consider guidance provided by prudential and securities regulators.  For more information, click  here . © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Audit Matters – AICPA Issues FAQs on Audit Matters and Auditor Reporting Related to COVID-19   Summary - The AICPA has published guidance in the form of a frequently asked questions (FAQs) file, FAQs — Audit Matters and Auditor Reporting Issues Related to COVID–19. Purpose of FAQs: The AICPA staff developed the FAQs to assist practitioners performing audit engagements and preparers of financial statements. The guidance is not authoritative and does not apply to preparation of and issuance of audit reports within the jurisdiction of the PCAOB, nor does it on accounting, disclosure, and reporting nuances for public companies. The AICPA intends to update the FAQs as it collects further questions. Topics Covered by the FAQs: The various questions and answers are grouped into the following categories as related to or due to the impact of COVID-19: General Accounting, Auditing and Reporting matters, including risks and uncertainties, subsequent events, and going concern; Audit and Auditor Reporting Specific Matters, including inventory observations, fraud inquiries, access to books and records, internal control, use of external confirmations, planning meetings, management representation letters, and emphasis of matter paragraphs and types of auditor’s reports; and  Accounting and Financial Reporting Specific Matters, particularly financial reporting considerations of the items as related to COVID-19, including fair value, asset impairments, unusual or infrequent events, and deferred tax assets. For more information, click here . © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

SEC Staff Speech, Staff Guidance for Conducting Shareholder Meetings in Light of COVID-19 Concerns  Summary - The SEC has updated its previously issued guidance from its staff to assist public companies, investment companies, shareholders, and other market participants affected by COVID-19 with their upcoming annual shareholder meetings. The guidance is designed to facilitate the ability of companies to hold these important meetings, including through the use of technology, and engage with shareholders while complying with the federal securities laws. For more information, click here . © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

SEC Staff Speech, Statement on the Importance of High-Quality Financial Reporting in Light of the Significant Impacts of COVID-19 by Sagar Teotia, Acting Chief Accountant, Office of the Chief Accountant  Summary - SEC Chief Accountant Sagar Teotia issued a Statement on the Importance of High-Quality Financial Reporting in Light of the Significant Impacts of COVID-19. Teotia indicates that the SEC’s Office of the Chief Accountant (OCA) is “taking a proactive approach and have been engaged with stakeholders across the financial reporting ecosystem – e.g., preparers, auditors, audit committee members, investors, standard setters, and other regulators – on issues related to current market developments.” Highlights of Teotia’s statement include: OCA recognizes that the accounting and financial reporting implications of COVID-19 may require companies to make significant judgments and estimates. Certain judgments and estimates can be challenging in an environment of uncertainty. OCA has consistently not objected to well-reasoned judgments that entities have made, and we will continue to apply this perspective. The recently passed Coronavirus Aid, Relief, and Economic Security Act (the CARES Act). OCA has received inquiries from preparers and auditors where the preparer has concluded that election of the narrow and limited options in Sections 4013 and 4014 of the CARES Act would be deemed to be “in accordance with GAAP.” For those entities that are eligible for, and elect to apply, either of Sections 4013 or 4014 of the CARES Act, the OCA staff would not object to the conclusion that this is in accordance with GAAP for the periods for which such elections are available. Section 4013 of the CARES Act provides a temporary relief to financial institutions (including credit unions) from GAAP as relates to troubled debt restructurings. Section 4014 of the CARES Act provides optional temporary relief to financial institutions (including credit unions) from the GAAP impacts of CECL (current expected credit loss) standards. OCA remains actively focused on auditor independence matters in these unprecedented times. OCA indicates that auditor independence is foundational to the credibility of the financial statements and is a shared responsibility among audit committees, management, and their auditors. Management and audit committees should be aware of how an auditor independence violation may affect the company’s required SEC filings. The challenges associated with many of the accounting issues in the current environment also exist internationally. OCA is actively engaged in discussions with the IASB on the impact of COVID-19, including through its involvement as the vice-chair of IOSCO’s Committee 1 on Issuer Accounting, Audit and Disclosure. Committee 1 is dedicated to improving the development of accounting and auditing standards, and enhancing the quality and transparency of the information that investors receive from listed companies, including financial institutions. For more information, click here . © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

SEC Staff Speech, Staff Statement Regarding Rule 302(b) of Regulation S-T in Light of COVID-19 Concerns  Summary - The SEC has issued Staff Statement Regarding Rule 302(b) of Regulation S-T in Light of COVID-19 Concerns. The SEC staff published this statement in response to inquiries from persons and entities subject to Regulation S-T regarding the authentication document retention requirements under Rule 302(b) in light of health, transportation, and other logistical issues raised by the spread of COVID-19. Given the public health and safety concerns related to COVID-19, the SEC staff published the statement to those affected by COVID-19 regarding Rule 302(b) of Regulation S-T. Rule 302(b) of Regulation S-T requires that each signatory to documents electronically filed with the SEC under the federal securities laws “manually sign a signature page or other document authenticating, acknowledging or otherwise adopting his or her signature that appears in typed form within the electronic filing.” Such documents must be executed before or at the time the electronic filing is made. Further, electronic filers must retain such documents for a period of five years and furnish copies to the SEC or its staff upon request. The SEC staff expects all persons and entities subject to Regulation S-T to “comply with the requirements of Rule 302(b) to the fullest extent practicable based on their particular facts and circumstances. However, the staff understands that some persons and entities subject to Regulation S-T may experience difficulties satisfying these requirements due to circumstances arising from COVID-19.” In light of these difficulties, the SEC staff will not recommend the SEC take enforcement action with respect to the requirements of Rule 302(b) if:  A signatory retains a manually signed signature page or other document authenticating, acknowledging, or otherwise adopting his or her signature that appears in typed form within the electronic filing and provides such document, as promptly as reasonably practicable, to the filer for retention in the ordinary course pursuant to Rule 302(b); Such document indicates the date and time when the signature was executed; and The filer establishes and maintains policies and procedures governing this process. The signatory may also provide to the filer an electronic record (such as a photograph or pdf) of such document when it is signed. For more information, click here . © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

SEC Staff Speech, Topic No. 9: Coronavirus (COVID-19)  Summary - The SEC has issued CF Disclosure Guidance Topic 9: Coronavirus (COVID-19), which provides guidance for consideration of COVID-19 (coronavirus). CF Disclosure Topic 9 provides guidance on these broad topics: Assessing and Disclosing the Evolving Impact of COVID-19; Need to Refrain from Trading Prior to Dissemination of Material Non-Public Information; and  Reporting Earnings and Financial Results. Corp Fin “has been monitoring how companies are reporting the effects and risks of COVID-19 on their businesses, financial condition, and results of operations and is providing the guidance as companies prepare disclosure documents during this uncertain time.” The guidance encourages timely reporting while recognizing that it may be difficult to assess or predict with precision the broad effects of COVID-19 on industries or individual companies. As events evolve, Corp Fin has indicated that it will provide additional guidance, if appropriate. Companies and their representatives are encouraged to contact Corp Fin with questions or if they believe there are additional areas where guidance or temporary relief may be necessary. For more information, click here . © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

SEC Staff Speech, SEC Staff Provides Guidance to Promote Continued Shareholder Engagement, Including at Virtual Annual Meetings, for Companies and Funds Affected by the Coronavirus Disease 2019 (COVID-19)   Summary - The SEC issued guidance from its staff to assist public companies, investment companies, shareholders, and other market participants affected by COVID-19 with their upcoming annual shareholder meetings. The guidance is designed to facilitate the ability of companies to hold these important meetings, including through the use of technology, and engage with shareholders while complying with the federal securities laws. The SEC indicated that many “public companies and investment companies are required to hold annual meetings of security holders, with the federal securities laws requiring the delivery of proxy materials to the voting shareholders. The spread of COVID-19 has affected the ability to hold these in-person meetings due to health, transportation, and other logistical issues. In light of these difficulties, the staff guidance provides regulatory flexibility to companies seeking to change the date and location of the meetings and use new technologies, such as ‘virtual’ shareholder meetings that avoid the need for in-person shareholder attendance, while at the same time ensuring that shareholders and other market participants are informed of any changes.” The guidance provides that affected parties can announce in filings made with the SEC the changes in the meeting date or location or the use of “virtual” meetings without incurring the cost of additional physical mailing of proxy materials. The guidance also encourages companies to provide shareholder proponents with alternative means, such as by telephone, to present their proposals at the annual meetings in light of the difficulties that shareholder proponents face due to COVID-19. The SEC will continue to closely monitor the impact of COVID-19 on investors and the capital markets. Companies, shareholders, and other market participants are encouraged to contact the SEC staff with any questions and concerns. For more information, click here . © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Exchange Act Rules – SEC Staff Updates Compliance and Disclosure Interpretation Summary - The staff in the Division of Corporation Finance (Corp Fin) has updated its Compliance and Disclosure Interpretation (C&DI), Exchange Act Rules (Questions 135.12 and 135.13). Corp Fin has updated this C&DI to reflect SEC and SEC staff guidance in response to COVID-19 (coronavirus). Guidance is provided on the following two questions: A registrant expects that due to COVID-19 it will be unable to file a report of the type covered by Rule 12b-5 on timely basis without incurring an unreasonable effort or expense. It is uncertain as to its ability to file the required report within the applicable 12b-25(b)(2)(ii) period. Should the registrant instead furnish a report on Form 8-K or 6-K, as applicable, relying on the COVID-19 Order (Release No. 34-88465 (March 25, 2020))? Can a registrant that filed a Form 12b-25 subsequently rely on the COVID-19 Order (Release No. 34-88465 (March 25, 2020)), to extend the filing deadline for the subject report?  For more information, click here . © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Featured Article & Podcast

SEC Adopts Amendments to Reduce Unnecessary Burdens on Smaller Issuers by More Appropriately Tailoring the Accelerated and Large Accelerated Filer Definitions Summary - In March 2020, the Securities and Exchange Commission (SEC) adopted amendments to the definition of accelerated filers and large accelerated filers. As a result, more companies can qualify as a smaller reporting company (SRC), which reduces burdens and compliance costs. For more information about the advantages of SRC status, please visit SEC.gov. Among the changes are a revenue test for exiting from both accelerated and large accelerated filer status and the possible elimination of including an internal control over financial reporting (ICFR) auditor attestation in the filing of Forms 10-K, 20-F and 40-F. Another change is lengthening the due dates for annual and quarterly reports to 90 calendar days and 45 calendar days, respectively. Important points to know about the amendments:  If an issuer has less than $100 million in revenue and qualifies for SRC status, an ICFR audit is not needed, regardless of market cap.  If an issuer was not previously eligible for SRC status but has less than $80 million in revenue, an ICFR audit may not be needed, regardless of market cap. Our featured podcast highlights the aforementioned amendments to the definition of accelerated filers and large accelerated filers. Please click on the image below to hear Steven Vertucci, Audit Partner, and Caroline Rosen, Marketing Manager, discuss the amendments. For this podcast and many more, please visit the Resources section of the MaloneBailey website. For more information about these amendments, please click here .

Recent FASB & AICPA Updates

FASB Accounting Standards Updates - No. 2020-04 —Reference Rate Reform (Topic 848) —Facilitation of the Effects of Reference Rate Reform on Financial Reporting   Summary - The FASB issued an Accounting Standards Update (ASU) that provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. This guidance is ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. LIBOR and other interbank offered rates are widely used benchmark or reference rates in the United States and globally. Trillions of dollars in loans, derivatives, and other financial contracts reference LIBOR, the benchmark interest rate banks use to make short-term loans to each other. With global capital markets expected to move away from LIBOR and other interbank offered rates toward rates that are more observable or transaction based and less susceptible to manipulation, the FASB launched a broad project in late 2018 to address potential accounting challenges expected to arise from the transition. The new guidance provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The ASU is intended to help stakeholders during the global market-wide reference rate transition period. Therefore, it will be in effect for a limited time through December 31, 2022. For more information, click here .  © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Financial Instruments – FASB Discusses Credit Losses Implementation  Summary - As discussed in its “Summary of Board Decisions” publication, the FASB met on March 11, 2020, and discussed a technical inquiry that its staff received on freestanding insurance contracts. Additionally, the FASB staff provided an update on the credit losses workshops. The meeting was educational and no decisions were made.  For more information, click here . © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Insurance Entities – AICPA Seeks Feedback on Insurance Entities Working Drafts Summary - The AICPA’s Financial Reporting Executive Committee (FinREC) has issued for public comment several working drafts of accounting issues for Insurance Entities, related to the implementation of FASB Accounting Standards Update (ASU) No. 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts. The new FASB accounting standard on Long-Duration Contracts makes targeted improvements to the existing recognition, measurement, presentation, and disclosure requirements for long-duration contracts issued by an insurance company. FinREC and the AICPA Insurance Expert Panel will continue to develop working drafts on accounting implementation issues that have been identified for the new standard. The working drafts for implementation of ASU 2018-12 are: Issue #9D: Deferred acquisition costs - Considerations for determining the expected term of the contract; and  Issue #11D: Upon adoption of FASB ASU 2018-12, whether it is permissible for an entity to change its accounting policy for all products for including the cost of reinsurance in loss recognition testing. Final issues for the project will be included in the Audit and Accounting Guide: Life and Health Insurance Entities. Comments on the proposal are due by May 15, 2020.  For more information, click  here . © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Business Acquisitions – IASB Consults on Improving Reporting on Business Acquisitions and Goodwill Accounting  Summary - The IASB has published the Discussion Paper, Business Combinations—Disclosures, Goodwill and Impairment, which seeks feedback on possible improvements to the information companies report about acquisitions of businesses to help investors assess how successful those acquisitions have been. The IASB is also seeking feedback on how companies should account for goodwill arising from such transactions. The comment deadline is September 15, 2020. Improving disclosures about acquisitions: Acquiring another business is a common way for companies to grow, although acquisitions do not always later perform as well as initially expected. According to feedback to the IASB, investors would like to know more about how an acquisition is performing in relation to such expectations, not least so that they can hold a company’s management to account for its acquisition decisions. In response to this feedback, the IASB is suggesting changes to International Financial Reporting Standards (IFRS) that would require a company to disclose information about its objectives for an acquisition and, in subsequent periods, information about how that acquisition is performing against those objectives. Accounting for Goodwill: The IASB also has considered whether to change the accounting for goodwill. Currently, companies must test goodwill for impairment annually, but stakeholders have mixed views about whether this test is effective. Some argue that the impairment test informs investors about an acquisition’s performance. Others say that the test is costly and complex, and that impairment losses on goodwill are often reported too late. The IASB tried to identify a better impairment test that would require a company to report at an earlier date if its goodwill had lost value. The current test provides information to investors, but it tests a broader set of assets than just goodwill. The IASB has concluded that there is no alternative that can target goodwill better and at reasonable cost and believes that the new disclosure requirements would provide investors with the information needed on the performance of an acquisition. Some stakeholders have suggested that the IASB should reintroduce amortization, which was the requirement in IFRS until 2004. Having considered the pros and cons of amortization, the IASB’s preliminary conclusion is that it should retain the impairment-only approach, because there is no clear evidence that amortizing goodwill would significantly improve the information that companies report to investors. The Discussion Paper also includes further proposals, including proposals to reduce the cost of the impairment test for preparers.  For more information, click  here . © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Leases and Revenue Recognition – FASB to Propose Delay in Effective Dates for Private Companies  Summary - As discussed in its “Summary of Board Decisions” publication, the FASB met on April 8, 2020. After the meeting, FASB Chair Russell G. Golden has issued the following statement: “The FASB held a public meeting to approve measures intended to provide stakeholders with accounting relief and clarity during the COVID-19 crisis. In the coming days, the FASB will issue a proposal to provide certain private companies and not-for-profit organizations with an optional, one-year effective date delay of the leases standard. Stakeholders will have a 15-day comment period from the time of issuance to review and provide comments on the proposal. The FASB will also add a project to its research agenda to see if there are opportunities to provide revenue recognition implementation expedients to franchisors. While that project is ongoing, the private company franchisors will also be given a one-year deferral for the revenue recognition standard. Additionally, the FASB staff soon will issue a leases question-and-answer document to help stakeholders account for the rapid, unprecedented lease concessions lessors are seeking to provide tenants during the pandemic. The staff also addressed implementation questions about other crisis-related issues, including interest income and loan payment holidays, hedging, and fair value accounting. The staff also noted that they have received questions related to accounting for loans from the Small Business Administration and that they will work with stakeholders to provide accounting clarity in that area as well. This information will be memorialized in FASB’s upcoming summary of tentative Board decisions (TBDs) and meeting minutes to be posted to the FASB website. We also announced that we will temporarily suspend issuance of other public exposure documents and will defer work that requires public outreach on other technical agenda projects to focus on supporting stakeholders as they navigate the impact of the crisis. Consequently, we have also decided to postpone our May 18, 2020 public leases roundtable meeting until a future date. Finally, it’s important to note that we recognize that there are other standards with effective dates of 2022 and beyond—and that companies implementing them are also suffering from a dislocation of accounting staff and a reallocation of resources. I want to assure them that the FASB is committed to understanding how the COVID-19 crisis is impacting their transition plans, and we will continue to address issues at a future Board meeting, including addressing the need for more time related to adoption. I would like to thank my fellow FASB members and the entire FASB technical staff for their diligent work in recent weeks to support our stakeholders. We will continue to closely monitor questions and concerns from our stakeholders, and we encourage them to continue to share them with us so we can help them during this difficult time. Questions can be submitted through the FASB’s Technical Inquiry Service.”  For more information, click  here . © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Recent SEC & PCAOB Updates

Release No. 33-10771: Securities Offering Reform for Closed-End Investment Companies  Summary - The SEC adopted rule amendments to implement certain provisions of the Small Business Credit Availability Act and the Economic Growth, Regulatory Relief, and Consumer Protection Act relating to business development companies (BDCs) and other closed-end funds. BDCs are a type of closed-end fund established by statute that primarily invest in small and developing companies. As directed by Congress, the rules will allow business development companies and other closed-end funds to use the securities offering rules that are already available to operating companies. The SEC indicates that the “amendments are designed to streamline the registration, offering and investor communications processes for BDCs and registered closed-end funds and will provide important benefits to market participants and investors, including advancing capital formation and modernizing and streamlining disclosures.” The SEC reforms will allow eligible funds to engage in a streamlined registration process that has long been available to operating companies, including modernized communications and prospectus delivery procedures and requirements. As a result, they will be better able to respond to market opportunities. The SEC also issued temporary, conditional exemptive relief for BDCs to enable them to make additional investments in small and medium-sized businesses, including those with operations affected by COVID-19. This temporary relief will “provide additional flexibility for BDCs to issue and sell senior securities in order to provide capital to such companies, and to participate in investments in these companies alongside certain private funds that are affiliated with the BDC.” The relief is subject to investor protection conditions, including specific requirements for obtaining an independent evaluation of the issuances’ terms and approval by a majority of a BDC’s independent board members. For more information, click here .  © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Release No. 34-88365: Amendments to the Accelerated Filer and Large Accelerated Filer Definitions  Summary - The SEC adopted amendments to the “accelerated filer” and “large accelerated filer” definitions. The SEC indicated that the amendments will “more appropriately tailor the types of issuers that are included in the definitions, thereby reducing unnecessary burdens and compliance costs for certain smaller issuers while maintaining investor protections. The amendments are consistent with the Commission’s and Congress’s historical practice of providing scaled disclosure and other accommodations to reduce unnecessary burdens for new and smaller issuers.” The amendments will: Exclude from the accelerated and large accelerated filer definitions an issuer that is eligible to be a smaller reporting company and had annual revenues of less than $100 million in the most recent fiscal year for which audited financial statements are available. Business development companies will be excluded in analogous circumstances. Increase the transition thresholds for an accelerated and a large accelerated filer becoming a non-accelerated filer from $50 million to $60 million and for exiting large accelerated filer status from $500 million to $560 million. Add a revenue test to the transition thresholds for exiting both accelerated and large accelerated filer status. Add a check box to the cover pages of annual reports on Forms 10-K, 20-F, and 40-F to indicate whether an ICFR auditor attestation is included in the filing. The final amendments will become effective 30 days after publication in the Federal Register and apply to an annual report filing due on or after the effective date. For more information, click here . © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Auditing Updates

SOC for Supply Chain – New Edition of AICPA Audit and Accounting Guide Published Summary - The AICPA has issued a new edition of its Audit and Accounting Guide, Reporting on an Examination of Controls Relevant to Security, Availability, Processing Integrity, Confidentiality, or Privacy in a Production, Manufacturing, or Distribution System. This new edition has been released due to the edition of certain indexes. This guide has been developed by members of the SOC for Supply Chain Working Group of the AICPA Assurance Services Executive Committee (ASEC) in conjunction with members of the Auditing Standards Board.  For more information, click  here . © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Auditor Reporting – AICPA Releases SAS 140 to Complete Project to Conform GAAS with Reporting Provisions in SAS 134  Summary - AICPA’s Auditing Standards Board (ASB) has issued the final Statement on Auditing Standards (SAS) No. 140, Amendments to AU-C Sections 725, 730, 930, 935, and 940 to Incorporate Auditor Reporting Changes From SAS Nos. 134 and 137. SAS 140 completes the ASB’s project to conform U.S. generally accepted auditing standards (GAAS) with the recently issued auditor reporting standards, starting with SAS 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements. Auditor Reporting Standards: The ASB released SAS 134, the first of the recent auditor reporting amendments, in May 2019. Since that time, it has released the following SASs with the same effective dates: SAS No. 135, Omnibus Statement on Auditing Standards—2019 (released with SAS 134); SAS No. 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA; SAS No. 137, The Auditor’s Responsibilities Relating to Other Information Included in Annual Reports; SAS No. 138, Amendments to the Description of the Concept of Materiality; and  SAS No. 139, Amendments to AU-C Sections 800, 805, and 810 to Incorporate Auditor Reporting Changes From SAS No. 134. Amendments to Standards by SAS 140: SAS 140 makes conforming changes to AU-C Sections 725, 730, 930, 935, and 940 to incorporate auditor reporting changes from SAS 134 through 137. The amendments also include changes to other AU-C sections in AICPA Professional Standards to reflect practice issues that have arisen since the most recent revisions to these AU-C sections. It also amends AU-C section 935, Compliance Audits, to be consistent with current governmental requirements. Effective Dates: Although the effective date in SAS 140, as written, is for audits of financial statements for periods ending on or after December 15, 2020. As with SASs 134 through 139, early implementation is not permitted. However, the ASB has announced that it will hold a teleconference meeting on April 14, 2020 at which it will discuss extending the effective date for the suite of auditor reporting standards, including SAS 140, for one year, and to permit early implementation of the SASs. The ASB is expected to release an exposure draft with the proposed amendments to SAS 134 through SAS 140 later this week. For more information, click here . © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Auditing Standards – ASB to Vote to Extend Effective Dates  Summary - The AICPA’s Accounting Standards Board (ASB) will meet by teleconference on Monday, April 20, 2020 from 2:00 – 4:00 p.m. (EDT). As the sole item on the agenda, the ASB will discuss and vote to ballot to issue as a final standard Statement on Auditing Standards (SAS) No. 141, Amendment to the Effective Date of SAS Nos. 134 Through 140. Recent Auditor Reporting Standards: In background, the ASB agenda discussion paper discusses the recently issued auditor reporting standards that have effective dates for audits of financial statements for periods ending on or after December 15, 2020. These include: SAS 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements, as amended; SAS 135, Omnibus Statement on Auditing Standards—2019; SAS 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA, as amended; SAS 137, The Auditor’s Responsibilities Relating to Other Information Included in Annual Reports; SAS 138, Amendments to the Description of the Concept of Materiality; SAS 139, Amendments to AU-C Sections 800, 805, and 810 to Incorporate Auditor Reporting Changes From SAS No. 134; and SAS 140, Amendments to AU-C Sections 725, 730, 930, 935, and 940 to Incorporate Auditor Reporting Changes From SAS Nos. 134 and 137. Further, SAS 134 and SAS 136 – 140 do not permit early implementation. ASB Proposal to Defer Effective Dates: The ASB is proposing a one-year deferral of the effective dates of recently adopted auditing standards. due to the COVID-19 pandemic. As noted in the agenda discussion, the ASB has heard from firms that regardless of when the pandemic “is declared over or social distancing restrictions are lifted, small and mid-sized firms are expected to struggle for some time with meeting payroll, layoffs, paying bills, collecting invoices, losing portions of their client base whose business simply no longer exists, keeping up with training requirements, and so on as they are small businesses in their own right.” Given these circumstances, the ASB believes that deferring these significant standards would provide needed relief to the small firms. Effective Date Change: Instead of the current effective date for audits of financial statements for periods ending on or after December 15, 2020, SAS 134 through SAS 140 would be effective for audits of financial statements for periods ending on or after December 15, 2021. In addition, SAS 141 would provide for early implementation of the standards to permit firms to proceed if they are able to do so. The meeting will be open to observers, who must register for the call. The week of the meeting, the ASB will send dial in information to those who register.  For more information, click here . © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Tax Updates

Filing Deadlines Postponed to Serve as Relief for COVID-19 Pandemic Written by Tabitha Ford, Tax Senior, MaloneBailey Summary - The Internal Revenue Service (IRS) has provided various relief options to mitigate the economic destruction caused by the ongoing COVID-19 pandemic. The most significant relief option is the postponed filing deadline provided to affected taxpayers defined in IRS Notice 2020-23 as anyone who requires a specified time-sensitive action to be performed on or after April 1, 2020 and before July 15, 2020. According to the notice, specified time-sensitive actions also include an investment at the election of a taxpayer due to be made during the 180-day period described in 1400Z-2(a)(1)(A) of the code. For an affected taxpayer with respect to specified filing and payment obligations, the due date for filing specified forms and making specified payments is automatically postponed to July 15, 2020 and does not require any action to be taken. Those that need additional time to file may file the appropriate extension form by July 15, 2020; however, the extended due date will remain the original statutory or regulatory extension date. Specified returns and payments qualified for the postponed filing deadline: Individual income tax returns and payments: Form 1040, 1040-SR, 1040-NR, 1040-NR-EZ, 1040-PR and 1040-SS Calendar year and fiscal year corporate income tax returns and payments: Form 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-S, 1120-SF Calendar year and fiscal year partnership returns: Form 1065 and Form 1066 Estate and Trust Income tax returns and payments: Form 1041, 1041-N, 1041-QFT Gift, Estate and Generation-Skipping tax payments and return filings: Form 709, 706-NA, 706-A, 706-QDT, 706-GS(T)M 706-GS(D)M 706-GS(D-1) Information regarding beneficiaries acquiring property from a decedent: Form 8971 Exempt organization Business income tax returns and payments: Form 990-T Excise tax payments on investment income and return filings: Form 990-PF, 4720 Quarterly estimated income tax payments: Form 990-W, 1040-ES, 1040-ES (NR), 1040-ES (PR), 1040-ES, 1120-W The relief includes not only the specified forms, but also the schedules, elections and other forms that are required to be filed along with the specified form. Additionally, the calculation of interest, penalties or addition to tax for failure to file or pay will be disregarded until July 16, 2020. For more information regarding federal relief options in response to COVID-19 , please feel free to contact our Senior Tax Manager, Nicole Zhao .    Click here for more information.

Extra Crunch

MaloneBailey Hosts Virtual Webinar on April 7, 2020: The CARES Act - Your Complete Guide Summary - On April 7, 2020, MaloneBailey delivered a virtual presentation on the The CARES Act - Your Complete Guide on Tax Relief, Paycheck Protection Program & Families First Coronavirus Response Act. Key Topics Covered: Introduction, clarifications and tax considerations on the forgivable SBA Loan under the CARES Act Paycheck Protection Program Introduction of COVID-19 paid leave for workers and tax credits for small businesses under the Families First Coronavirus Response Act Review of other stimulus payments and tax credits Kindly note the information provided in the presentation is based on information available as of April 7, 2020. Information is changing regularly so we encourage you to check and verify information. A recording of the English version of the presentation is available  here . A recording of the Mandarin version of the presentation is available  here .

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