Topic: Application of the Taxonomy for COVID-19 Pandemic and Relief Disclosures

 

Purpose of This Taxonomy Staff Q&A


This FASB Taxonomy staff question-and-answer document (Q&A) focuses on the application of the US GAAP Financial Reporting Taxonomy (Taxonomy) to disclosures related to the effects of the coronavirus (also referred to as COVID-19) pandemic and relief efforts.

As part of its continuing commitment to stakeholders, the FASB Taxonomy staff has created this Q&A to address the application of the Taxonomy to disclosures in the following areas:
  1. Income taxes
  2. Payroll taxes
  3. Loans
  4. Grants
  5. Pensions
  6. Overall discussion of the COVID-19 pandemic.
The responses provided in this Q&A should not be analogized to other facts and circumstances not specifically discussed.

The FASB Taxonomy staff will continue to monitor this unique and evolving situation and communicate additional application of the Taxonomy as appropriate.
 

Questions and Answers


COVID-19 Disclosures


Question 1


How should the Taxonomy be applied to the note to the financial statements specific to COVID-19 information?
 

Response


If the financial statements include a separate note on COVID-19, the Taxonomy element “Unusual or Infrequent Items, or Both, Disclosure [Text Block]” is intended to be used for the note. However, to alert readers that the note relates to COVID-19, the preferredLabel attribute (the preferred label) for the element should end with “COVID-19.” Conforming to this structure will allow consumers to search text on an agreed-upon term while using an existing Taxonomy text block.
 

CARES Act Disclosure

Income Taxes

Net Operating Losses


Question 2


How should the Taxonomy be applied to the disclosure of the effect on the financial statements of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) related to the modifications of limitations on the deductibility of net operating losses?
 

Response


Extension elements are intended to be used for disclosures of changes in tax laws from the CARES Act related to the modification of limitations on the deductibility of net operating losses that are consistent with existing Taxonomy elements (such as Income Taxes Receivable, Income Tax Expense (Benefit), and Continuing Operations, Adjustment of Deferred Tax (Asset) Liability) with preferred labels that end with “CARES Act.” For example, an extension element for the tax receivable to disclose the effect of a carryback of net operating losses would have the preferred label “Income Taxes Receivable, Net Operating Loss, CARES Act.” Conforming to this structure will allow consumers to search text on an agreed-upon term and facilitate searchability.
 

Alternative Minimum Tax Credits


Question 3


How should the Taxonomy be applied to the disclosure of the effect on the financial statements of the CARES Act related to the acceleration of Alternative Minimum Tax (AMT) credits under the CARES Act?
 

Response


Extension elements are intended to be used for disclosures of changes in tax laws from the CARES Act related to the acceleration of AMT credits that are consistent with existing Taxonomy elements (such as Income Taxes Receivable) and that have a preferred label for the extension element that ends with “CARES Act.” An example would be “Income Taxes Receivable, Alternative Minimum Tax, CARES Act.” Conforming to this structure will allow consumers to search text on an agreed-upon term and facilitate searchability.
 

Depreciation of Qualified Improvement Property


Question 4


How should the Taxonomy be applied to the disclosure of the effect on the financial statements of the CARES Act for amendments related to the depreciation of qualified improvement property under the CARES Act?
 

Response


Extension elements are intended to be used for disclosures of changes in tax laws from the CARES Act related to the recognition of depreciation of qualified improvement property that are consistent with existing Taxonomy elements (such as Income Taxes Receivable with a preferred label for the extension element that ends with “CARES Act”). An example would be “Income Taxes Receivable, Qualified Improvement Property, CARES Act.” Conforming to this structure will allow consumers to search text on an agreed-upon term and facilitate searchability.
 

Other CARES Act Disclosures


Question 5


How should the Taxonomy be applied to the disclosure of threshold values related to the specific provisions of CARES Act relief efforts?
 

Response


Disclosure of threshold values that simply reiterate the provisions of relief programs under the CARES Act (for example, the percentage of the loan that must be used for payroll to qualify under the Paycheck Protection Program [PPP] or the percentage of the employer payroll taxes that must be paid by December 31, 2021) do not need to be tagged because the information is the same for all filers; it is not specific to the filer. Disclosure in this manner is consistent with question 146.16 of the SEC staff’s Compliance and Disclosure Interpretations—Interactive Data (last update: August 20, 2019) that provides examples of the types of monetary values, percentages, and numbers that the SEC staff has agreed are not within the purpose of the current interactive data requirements and, as a result, need not be tagged separately to comply with Rules 405(d)(4)(i) and 405(e)(2)(i).
 

Question 6


How should the Taxonomy be applied to the disclosure of deferred payroll taxes, employee retention credits, and deferred pension contributions related to CARES Act provisions?
 

Response


Extension elements are intended to be used for disclosure of deferred payroll taxes, employee retention credits, and deferred pension contributions that end with “CARES Act.” Conforming to this structure will allow users to search text on an agreed-upon term and increase searchability. Any extension elements should be structured similar to other “CARES Act” elements. For example, an extension element for deferred employer share of payroll taxes would be “Social Security Tax, Employer, Deferral, CARES Act,” an extension element for employee retention credits would be “Employee Retention Credit, CARES Act,” and an extension element for deferred pension contributions would be “Defined Benefit Plan, Expected Future Employer Contributions, Current Fiscal Year, Deferral, CARES Act.”
 

Question 7


How should the Taxonomy be applied to the disclosure of transactions from lending programs under the CARES Act?
 

Response


Borrowers should apply the Taxonomy to disclosures of PPP loans and loans with other CARES Act credit facilities using Taxonomy elements where appropriate. The amount of debt should be disclosed using line items currently in the Taxonomy. Some possible elements that can be used for disclosures include, but are not limited to, “Debt Instrument, Face Amount,” “Proceeds from Lines of Credit,” “Repayments of Long-term Debt,” and “Repayments of Lines of Credit.” The element for the program from which the loan has been funded by should be created as an extension member on the “Debt Instrument [Axis]” or used with “Debt Instrument, Type [Extensible List].” Extension member elements should have preferred labels that end with “CARES Act,” such as “Paycheck Protection Program, CARES Act [Member]” and “Credit Facility, CARES Act [Member].” Conforming to this structure will allow consumers to search text on an agreed-upon term and facilitate searchability.

Lenders should apply the Taxonomy to disclosures of PPP loans and loans with other CARES Act credit facilities using Taxonomy elements where appropriate. Possible elements that can be used for disclosures of PPP loans and CARES Act credit facilities enabled by the lender include “Financing Receivable, before Allowance for Credit Loss,” “Financing Receivable, after Allowance for Credit Loss,” and “Payments for (Proceeds from) Loans and Leases.” Possible extension elements that can be used for disclosures that are commonly reported include, but are not limited to, “Financing Receivable, Number of Loans Authorized,” “Financing Receivable, Amount of Loans Authorized,” and “Financing Receivable, Number of Loans Funded.” One dimensional structure that may be appropriate is “Loans Insured or Guaranteed by Government Authorities [Axis].” Members included in that domain will depend on the source of the guarantee such as “Small Business Administration (SBA), CARES Act, Paycheck Protection Program [Member].”
 

Question 8


How should the Taxonomy be applied to the disclosure of grants from government relief programs initiated in response to COVID-19?
 

Response


The current Taxonomy has elements for grants receivable (for example, “Grants Receivable,” “Grants Receivable, Current,” and “Grants Receivable, Noncurrent”); however, additional extension line items may need to be created for commonly reported disclosures. Elements needed may include, but are not limited to, “Proceeds from Government Assistance” for amounts received and “Government Assistance, Statement of Income or Comprehensive Income [Extensible List]” and “Government Assistance, Statement of Financial Position [Extensible List]” to report which line item in the financial statements that the grant is included. Conforming to this structure will allow consumers to search text on an agreed-upon term and facilitate searchability.

Disclosures may need a dimensional structure (all extension elements) for multiple types of government assistance. For example, “Government Assistance [Axis],” “Government Assistance [Domain],” and “Government Assistance, CARES Act [Member]” may be appropriate extensions when applying the Taxonomy to the grant disclosures. If only one specific type of government assistance is received, “Government Assistance, [Extensible List]” may be extended to indicate the type of assistance.




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