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Private company insights: year-end reporting reminders for private companies

How prepared are you to close the books on 2020? In this year’s edition of Private company insights, we provide a summary of everything you need to know as you wrap up your 2020 financial reporting, including COVID-19 considerations and new accounting standards now effective. Specifically, we provide key insights and resources for private company financial statement preparers.

Overview of key insights and resources included in report

Pandemic-related accounting and reporting

  • Accounting for funds received through the Paycheck Protection Program (PPP) program, including potential forgiveness under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
  • Understanding the accounting models for recognizing and measuring impairments of tangible, intangible and financial assets.
  • Considering the impact of the pandemic on income taxes, revenue recognition, inventories and debt.

New accounting standards effective in 2020

  • Relief from the Financial Accounting Standards Board (FASB) when accounting for the effects of reference rate reform, including the discontinuance of the London Interbank Offered Rate (LIBOR), the most widely-quoted interest rate benchmark in loan arrangements.
  • Changes to accounting models for share-based awards granted to vendors, distributors and customers, including recognition and measurement of these awards.
  • Streamlining of financial statement disclosures relating to fair value measurements.

On the horizon — private company standard setting developments

  • The FASB continues to remain focused on reducing the cost and complexity of financial reporting for private companies through the introduction of streamlined accounting standards, where appropriate. Recent proposals include:
    • Simplifying the model for considering goodwill impairment triggering events for certain private companies. Adoption is expected in the first quarter of 2021 and may impact your 2020 financial reporting.
    • Streamlining the revenue recognition guidance for private company franchisors when identifying performance obligations.

2020 was a challenging year and we hope this publication serves as a helpful resource as you wrap up the financial reporting season and look ahead to 2021. 

For a deeper discussion, please contact:

Tom (Sully) Sullivan, Jr.

Partner, National Quality Partner and PCS XLOS Quality Leader, PwC US

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Shawn Panson

Shawn Panson

Private Leader, PwC US

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