IRS Rules on Deductions & Expenses Regarding Your PPP Loan

Have you considered taking a deduction on your expenses paid with PPP funds?

While it might be tempting, the IRS considers this double-dipping. Standard business deductions are not allowed by the IRS if payment of those expenses also results in PPP loan forgiveness.

Under the CARES Act, PPP loans for small businesses can be totally forgiven provided the funds are primarily used to retain employees, among meeting other requirements. However, CARES Act guidelines also state loan forgiveness is not tax-deductible. The forgiveness of your loan will result in a “class of exempt income” under 1.265(b)(1) of the Regulations.

According to Treasury Secretary Steven Mnuchin, “The money coming in the PPP is not taxable. So, if the money that is coming is not taxable, you cannot double-dip. You cannot say that you’re going to get deductions for workers that you did not pay for.”

Mnuchin stated that he had personally reviewed the IRS guidance and if the loan forgiveness had been deemed taxable, business deductions would be allowed. “This is basically tax 101,” said Mnuchin.

Many lawmakers have expressed a desire to re-address these guidelines in future legislation since the intent of the PPP loan program was to help small businesses maximize their ability to maintain fluidity, retain employees, and recover from this crisis as best possible. It is quite likely that IRS guidelines on tax exemption may be specifically addressed in any new coronavirus-related legislation to clarify the original intent of the PPP loan program under the CARES Act.

Link to IRS document.

The PPP Loan Program Extended

The Paycheck Protection Program (PPP) resumed accepting applications on July 6th, following the President signing the program’s extension over the July 4th weekend. According to the Small Business Association (SBA), approximately $130 billion allocated for PPP was left untapped once the original June 30th deadline expired. Small businesses now have an additional five weeks to apply for loans or until August 8th.


The SBA reported that 4.8 million businesses received funds, totaling $520 billion of the original $670 billion PPP funds authorized by Congress this past March. Businesses with fewer than 500 employees may apply for a PPP loan through any existing SBA 7(a) lender or FDIC bank, federally insured credit union, and Farm Credit System institution that is participating in the program.


Total loan forgiveness is available to businesses who prove they have suffered a 50 percent or more revenue loss, due to the pandemic. Additionally, at least 60% of the PPP funds must be spent on payroll costs, while the other 40% may be allocated for assistance with rent, utilities, and interest on mortgages.


Congress is expected to address further emergency relief funding in late July, as well as ways to repurpose any leftover funds. Lawmakers have also discussed the possibility of permitting businesses with fewer than 100 employees to apply for a second loan, as well as sole proprietorships and self-employed individuals, provided they have exhausted their original PPP loan.

Link to the SBA Application.

IRS Expands Eligibility on COVID-19 Distributions from IRAs

The IRS expanded its guidelines on June 20th with Notice 2020-50 that allows additional qualified individuals to take a coronavirus-related distribution (CRD) while avoiding the usual restrictions on early IRA distributions. Under the CARES Act, qualified individuals may receive favorable treatment for IRA distributions up to $100,000 from eligible retirement plans (i.e. 401k/403b and 457s) until December 31, 2020. Additionally, the 10% tax on early distributions is waived for any CRD if the distribution is taken before the account holder reaches 59 ½.

The Notice expands eligibility of “qualified individual” under the CARES Act

The original Act indicates a qualified individual is someone diagnosed with COVID-19, whose spouse or dependent is diagnosed with COVID-19 by a CDC approved test or a person who experienced adverse financial consequences resulting from being quarantined, furloughed or laid off or having hours reduced, unable to work due to lack of child care or closing or reduced hours for a business owned by the individual, any as a result of COVID-19.

The definition of “qualified” was expanded to include the individual and/or spouse, or a member of the individual’s household who had a job offer rescinded or start date delayed due to COVID-19. Additionally, a qualified individual includes someone whose income is affected by COVID-19 because a spouse or other household member (sharing the principal residence) experienced an income reduction due to COVID-19.

Also qualifying are household members unable to work due to lack of childcare because of COVID-19, as well as business owners/operators who lose income due to closing or reducing hours of business due to COVID-19.

Notice 2020-50 clarifies that while it is optional for employers and plans to designate distributions as COVID-related, qualified individuals whose distributions meet the above requirements will still receive this favorable federal tax treatment, even if a distribution is not classified as a CRD by the employer.

The CARES Act also provides somewhat of a tax holiday to a Qualified Individual

While a distribution from a qualified retirement plan is generally included in taxable income in the year of distribution, the CARES Act permits a qualified individual to include a CRD in taxable income ratably over a three-year period.  Notice 2020-50 clarifies this is an election on the part of the qualified individual who may choose instead to include the entire CRD in taxable income in the year of receipt; however, this election may not be changed. All CRDs must be treated in the same manner as reflected on the qualified individual’s 2020 tax return.

Additionally, the CARES Act permits a qualified individual to re-contribute a CRD to a qualified retirement plan. Unlike the tax treatment of a CRD, whether a CRD will be re-contributed to a qualified retirement plan or the manner in which it will be re-contributed, does not have to be determined before the filing of the qualified individual’s 2020 tax return.  Notice 2020-50 says that the decision can be made at any time during the three-year period and provides for the filing of amended returns to reflect the re-contribution of all or a portion of the CRD.

Link to IRS Notice 2020-50

Spiegel Joins National Lending Experts

The National Lending Experts (NLE) recently announced Jeff Spiegel as the CPA/Business Advisor, and newest member, of its Advisory Board. Jeff accepted the invitation to contribute to the NLE network and offer leadership in the areas of tax, accounting, audit, and business consulting.

The NLE established itself to provide core leadership and guidance by offering up-to-date information and education on market conditions and trends via virtual platforms and national events. The organization is committed to connecting industry professionals with leadership and direction as it pertains to every aspect of the real estate industry, including residential and commercial lending, servicing, valuation, secondary markets, litigation, rehab/construction, and best practices.

Jeff looks forward to collaborating with his fellow Advisors by providing valuable resources to further industry success.

Learn more about The National Lending Experts.

COVID-19 Relief Under the Stafford Act

The President issued an emergency declaration in response to the coronavirus pandemic under the Stafford Act and subsequently approved major disaster declaration requests under Sec. 401(a) of the Stafford Act for all 50 states. Jurisdiction for the state of emergency, which took effect January 20, 2020, provides relief and assistance to businesses – including tax relief. Businesses experiencing financial loss directly due to COVID-19, during the disaster year, may elect to accelerate those losses to the 2019 fiscal year.


To accelerate a loss under these relief provisions:

  • Compensation for the loss cannot come from insurance or otherwise
  • It must be by a closed and completed transaction
  • The loss must be caused by an identifiable event
  • The losses sustained must relate to the disaster event and must be sustained during the taxable year of the event

Potential losses to accelerate on the preceding year tax return, if directly attributable to COVID-19:

  • Abandonment of business deals for costs otherwise capitalized
  • Abandonment of leasehold improvements
  • Costs related to the closure of store, branch, and facility locations
  • Inventory spoilage during the government shutdown
  • Losses from the sale or exchange of property
  • Mark-to-market securities
  • Permanent retirement of fixed assets
  • Prepaid events for travel, conference space, and hotel rooms when a refund or credit is not provided
  • Prepaid expenses to fulfill a contract when the contract is canceled
  • Payments to cancel contracts, leases, or licenses
  • Worthless securities (excluding bad debts)

The election to accelerate the loss is done on an original or amended 2019 tax return. This is a temporary tax adjustment, meaning any loss accelerated into the preceding tax year will no longer offset the current year activity.

For mortgage bankers, there may be losses on hedge positions or mortgage loans held for sale on closed deals that can be taken in 2019. All losses must be the direct result of the current coronavirus pandemic.

If the disaster loss creates a Net Operating Loss (NOL) in 2019, the taxpayer may have the added benefit of carrying back the NOL up to 5 years.

If you would like to discuss your filing options under the disaster relief provisions related to COVID-19, please contact your Spiegel tax manager.

Download the document.

Financial Statement Reporting for Proceeds from PPP Loans

History of the Paycheck Protection Program

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provided an estimated $2.2 trillion to fight the COVID-19 pandemic and stimulate the US economy, including $349 billion that was earmarked for the Paycheck Protection Program (PPP) to be administered by the U.S. Small Business Administration (SBA). An additional $310 billion was later authorized for the PPP.

Under the PPP, eligible businesses can apply to an SBA-approved lender for a loan that does not require collateral or personal guarantees. The loans have a 1% fixed interest rate and are due in two years. However, these loans are eligible for forgiveness (in full or in part, including any accrued interest) under certain conditions. For loans (or parts of loans) that are forgiven, the lender will collect the forgiven amount from the U.S. government. A recent bill has extended the repayment term to five years for any portion of the loan not forgiven.

Businesses, including mortgage bankers, must meet certain eligibility requirements to receive PPP loans and are required to meet PPP guidelines to receive loan forgiveness. Therefore, it is vital to maintain detailed documentation of the initially submitted eligibility criteria, submitted by management, as well as detailed PPP loan expenditure documentation to support payroll expenses and other eligible expenses used for loan forgiveness.

Loan forgiveness applications are subject to audit by the U.S. government with a 6-year statute; however, businesses that borrow less than $2 million are expected to receive an automatic “good faith” certification, which may mean these businesses will not be subject to an audit. Future scrutiny of the good faith certification will depend on additional guidance issued by the SBA.

Businesses that received a loan over $2 million will be subject to greater scrutiny, audit, and may be deemed ineligible. The SBA may request repayment if it is determined required expenditure guidelines were not met and more importantly, the business entity did not actually qualify for a PPP loan.

Authorized Use of Loan Proceeds

A bill passed June 5, 2020 has extended the forgiveness period from 8 weeks to 24 weeks, lowered the percentage spent on payroll costs from 75% to 60% with the remainder allotted for rent, utilities, and interest payments. This new legislation contained the stipulation that if a minimum of 60% is not used for payroll costs, no amount of the loan can be forgiven. However, following the bill’s passage, the U.S. Treasury and SBA released a joint statement clarifying that borrowers who fail to meet the 60% threshold would qualify for partial loan forgiveness. You can choose which accounting rule to apply with respect to the PPP loan. Costs are defined below:

“Payroll Costs” – This is a key term for PPP loans and includes virtually all compensation paid to employees, as salaries, commissions, or similar compensation, including tips, vacation pay, family/parental leave and sick leave. Total compensation is capped at $100,000 per year for any person, and does not include payroll taxes imposed on the employer or withheld from the employee, plus:

  • Any state or local taxes assessed on the compensation of employees paid by the employer
  • Severance pay (allowance for dismissal or separation)
  • Costs related to the continuation of group health benefits and any retirement benefits (presumably including all COBRA benefits) Payments of interest on any pre-existing debt or mortgage obligation (but not  payment or prepayment of principal on such obligations)
  • Rent (including rent under an equipment or other lease), and
  • Utilities.

Eligibility for Loan Forgiveness

PPP loan recipients must certify, in good faith, that the loan was required to continue operations due to the current economic circumstances and acknowledge that the funds have been used to retain workers and maintain payroll or make business interest, rental or lease and utility payments, and that the applicant does not have other “covered loan” applications pending for similar or duplicative purposes.

 Alternative Accounting Treatment for PPP Loan Proceeds

Under the Financial Accounting Standards Board, Accounting Standards Codification (ASC) 470, Debt, a PPP loan is considered debt, regardless of whether the borrower expects the loan to be forgiven. Alternatively, the borrower may choose to consider the loan as a government grant and amortize the funds as they are used and there is a reasonable possibility of the loan being forgiven.

A Closer Look: Accounting for the PPP Loan as Debt

Under ASC 470, a business entity would record the full amount of the PPP loan as a liability and accrue interest over the term of the loan until the loan is forgiven. Considerations: This model would be more prudent for an entity that determines there is a reasonable possibility of not meeting the necessary criteria for loan forgiveness, or the business entity determines that maintaining the debt for financial statement reporting purposes does not impact debt eporting requirements or other financial metrics.

For income statement purposes, any PPP forgiveness would be considered gain on extinguishment of debt. For cash flow statement purposes, PPP loan proceeds would be considered a financing cash inflow; repayments would be considered a financing cash outflows; and forgiven amounts would be a noncash financing activity.

Accounting for the PPP Loan as a Government Grant

The current CARES Act/PPP framework provides clear guidance on the eligible uses of the PPP loan. Businesses that have high degree of confidence in their ability to qualify for loan forgiveness, and believe they have or will meet the authorized expenditure requirements are able to amortize the loan to income as expenses are accrued or paid. While there are no clear U.S. generally accepted accounting principles (U.S. GAAP), references related to this type of government loan provided to for-profit entities, an analogy could be made to ASC 958, Not-for-Profit Entities, Conditional Contribution or ASC 450, Contingencies, Gain Contingencies.  While not U.S. GAAP, International Accounting Standard (IAS) 20, Accounting for Government Grants and Disclosure, provides a model to account for and forgive government loans. Under this model, the PPP loan would be accounted for as a grant, and a deferred liability established when funds are received. The deferred liability would be recognized in earnings in accordance with the requirements of the authorized PPP expenditures. Considerations: If this accounting treatment is elected, the business entity will have to continually assess whether it continues to meet the eligibility criteria. The SBA has also stated that it will provide further guidance and clarification regarding acceptable PPP expenditures.

For income statement purposes, the amortization of the grant would be reflected as other income, or a reduction of the expense to which it pertains.

For cash flow statement purposes, loan proceeds could be considered operating cash inflows because of nature of the expenses for which the loan is intended (e.g., payroll, rent). However, loan proceeds from financing activities may also be acceptable.


For either accounting treatment, the business should disclose the nature of the PPP, including the funds received, the amount deferred, the recognition of deferred amounts, and the requirements to recognize the deferred amounts as income.

Download the Spiegel document.

PPP Loan Forgiveness Application

Treasury, SBA Release Loan Forgiveness Application

The US Treasury and the Small Business Administration (SBA) have coordinated to release the Paycheck Protection Program (PPP) Loan Forgiveness Application. The PPP was enacted under the CARES Act to provide eligible small businesses with loans during the COVID-19 pandemic. The application and corresponding instructions advise borrowers on how to apply for forgiveness of PPP loans under the CARES Act.

The SBA is expected to issue regulations and guidance to assist borrowers as they complete their applications, according to the Treasury. Spiegel has been providing guidance to its clients as they work to navigate their way through the application process. It is important to provide the correct information, regarding the business loan, to ensure loan forgiveness.

Measures intended to reduce compliance burdens and simplify the process for borrowers include:

  • options to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles;
  • flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan;
  • step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness;
  • borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30; and
  • the addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined.

Reach out to Spiegel directly if you would like assistance with the application (below).

SBA Paycheck Protection Program Loan Forgiveness Application; Treasury Press Release, May 15, 2020

Designing Nonperforming Notes

Designing Nonperforming Notes was originally published in AAPL’s Spring Edition 2020 of Private Lender Magazine.

A nonperforming loan (NPL) is a type of note that is in default, distressed, delinquent or otherwise dilapidated. NPLs are interchangeably used with nonperforming notes, distressed debts or distressed loans. Generally, an NPL holder no longer anticipates repayment from a borrower in accordance with the original terms.

These NPLs are sold in a private market, typically between 50 cents or 80 cents on the unpaid principal balance (UPB), depending on a variety of factors. Those can include length of time the note was in default, collateral value and probability of a successful outcome.

A buyer purchases these NPLs with one or a combination of these strategies: (1) modification or extension (2) reinstatement (3) borrower pay-off or (4) foreclosure. An analysis of these notes, including borrower information and exit plan, is crucial when purchasing these NPLs.

Logically, the same buyer needs money to purchase these notes. If fortunate, the buyer may self-finance the purchase. Alternatively, the buyer may sponsor in a fund structure and gather a pool of investors to raise capital or set up a direct investment model where the investors are noteholders themselves via whole or fractional interests. In a fund model, the buyer will typically act as the fund manager in a general partner/limited partner structure and deliver profit return to these investors.

When setting up the fund, however, the fund manager should consider the following issues.

Securities Exemption

The fund manager must first understand that when accepting money from an investor, the manager is selling securities. Accordingly, the fund manager must either register the fund securities with the Securities and Exchange Commission (SEC) or be exempt under one of the securities laws. One of the most popular exemptions implemented in the private investment arena is Regulation D, Rule 506 or, alternatively, Tier 2 Regulation A offering.

Fund Structure

From a fund structure perspective, there are two prevailing strategies typically implemented in the NPL space: open-ended versus closed-ended. Both have sound reasoning, but there are implications to these strategies.

Closed-Ended versus Open-Ended Fund

closed-ended fund is a structure that has a definite capital raising and closing period. The typical timeframe ranges between one to three years. As soon as the target maximum is raised, the fund closes the offering and begins operation. This way, all the investors have the same admission and accounting period, and the fund is generally easier to administer. On the other hand, the fund manager is restricted from additional capital raise. The typical raise is between $1 million and $5 million in a close-ended fund. If the manager wants to raise additional capital, he or she needs to set up another fund. This results in additional legal and/or tax costs.

A closed-ended fund strategy works in the NPL space because there is an inherent and substantial risk when purchasing notes at a discount. There is an uncertainty of when (or if) the notes will perform and when investors will be paid. Closing the offering limits the exposure of risk of payment to the investors.

Conversely, an open-ended fund is a structure that has an indefinite and ongoing capital raise. The open-ended fund typically has a higher max offering ceiling and a much longer time horizon. Because it is an ongoing raise, the admission and accounting period differs, and the fund is exposed to certain investor payment risks. These concerns can be mitigated by diversifying the portfolio through performing note acquisition or origination, or reperform the NPLs.

Nevertheless, in either model, the fund manager should be aware that NPLs need time to reperform, modify or otherwise produce income. To account for that expectation, a fund manager may provide additional features not seen in traditional mortgage funds: (1) cumulative preferred return (or otherwise deferred return), (2) longer lock-up period, (3) performance-based rates, or (4) elect to form a close-ended fund. To be sure, an open-ended fund can be liquidated when the manager wishes to do so, or simply cease raising capital. Ultimately, investor appetite and risk tolerance matters.

Discount Recognition

NPLs are purchased at a discount, which is the difference between the UPB and the acquisition cost. Implicitly, the fund will need to adopt a tax method of accounting for recognition of the discount into income.

The two available methods for tax purposes are:

  1. The cost recovery method.
  2. The market discount method.

Several factors should be considered in determining which method to use, including whether the fund is closed-ended or open-ended, because there will be an impact on the timing of taxation for the investors.

Neither the cost recovery nor the market discount method is permitted under generally accepted accounting principles (GAAP), further increasing and complicating the accounting. Either approach can be used in a fund environment; however, the preferred method for a fund with investor money is usually the market discount method.

Whether the cost recovery method or the market discount method is selected, the UPB is recorded as an asset with the discount recorded as a contra-asset on the balance sheet. When a payment is received, interest income is always reported as income, and the principal reduces the UPB and cost basis.

The cost recovery method can only be elected if the purchase is considered speculative, where there is a strong possibility that the cost basis and a portion of the discount may not be collected. Under the cost recovery method, income recognition on the discount is deferred until the cost basis of the NPL is recovered. The cost recovery method works in situations where the fund is closed-ended and not admitting new investors during the life of the fund. This method defers taxation of the discount into future years.

A second tax method is the market discount method, which amortizes the discount in tandem with the principal payments as they are received. This method is more appropriate for open-ended funds, which allow new investors into the fund over the fund’s life.

The rate of amortization will correlate to the expected principal payments received over the remaining life of the loan. If the fund manager expects to receive all the payments, then a straight-line method of recognition is practical. The amount of amortization will be a function of the total discount over the expected number of payments to maturity.

Modifications and Foreclosures

Modifications can be an attractive alternative to foreclosing on an NPL. While the fund may not recover all the UPB’s obligated payments, offering new manageable terms can result in a pay-off that produces a favorable yield.

It is critical to understand the accounting implications of modifications as it may lead to an unintended outcome. For tax purposes, if the modification results in a significant modification, then there is a new loan. The new loan will be recorded at fair value, meaning any difference between the old and new value will be a recognized gain or loss. Be sure to consider the amount of the discount that hasn’t been amortized, as it will factor into the gain or loss.

A loan modification is considered “significant” for tax purposes when based on all the facts and circumstances, the legal rights or obligations that are altered along with the degree of alteration are economically significant. This occurs when there is a change in any of these items. A change in:

  • Annual yield of greater than 25 basis points or 5% of the annual yield of the unmodified loan.
  • Timing of payments, deferring the period the greater of five years or 50% of the original note term.
  • Obligor or security.
  • The nature of the loan.
  • Financial or accounting covenants.

If the modification is a significant modification, then the lender must issue a Form 1099-C, Cancellation of Debt to the borrower.

A forbearance would not be considered a significant modification provided:

  • There is no written or oral agreement.
  • It does not exceed two years plus any period of good faith negotiations.
  • The borrower is in bankruptcy.

Foreclosing on NPLs has a similar effect as loan modifications, but with different considerations of the fair value. At the time of foreclosure, there is a new asset with the previous loan considered as noncollectible debt.

Considerations should be given to the valuation method of recording the fair value of the real estate owned asset (“REO). A BPO may not represent the actual long-term value. Foreclosed assets can come with renovations and carrying costs if the intent is to sell. The value of the REO should factor in selling costs such as open house staging or commissions at sale.

REOs in the portfolio are always subject to ongoing impairment testing, but within reason you can quantify the expected differences between the fair value and net gain at disposition.

Phantom Income and Taxes

You may notice that NPLs have more situations where income is reported, even if there aren’t any cash proceeds. This “phantom income” is taxed to the investors as the income is recognized. The timing of recognition of income versus timing of cash distributions may vary widely, resulting in a taxable event without cash to pay the tax. Fund managers may want to time the disposal of some of the fund loans or REOs to have cash reserves on hand for distributions.

While there are asset strategies such as syndications that renovate properties before they generate income, a portfolio of loans can imply cash flow in the minds of investors. When creating the offering, consider how the portfolio supports the waterfall to investors. Will there be a distribution of cash monthly based on payments from reperforming loans? Should the fund incorporate incentive fees or acquisition/disposition fees for loans that will be held for less than six months?

Another surprising factor for fund managers is that foreclosing and holding REO assets may lead to tax implications for the investors in other states. Thirty states consider foreclosing on even only one parcel of real estate located within that state to be a nexus-creating activity resulting in a state tax filing. Within the context of an NPL fund formed as a passthrough entity, investors will receive-multistate K-1s for each year that there is a foreclosure or REO asset held in another state. The fund may need to withhold taxes from the investor’s distributions and pay taxes directly to the state.


Designing an NPL fund can be complicated. Without careful consideration, the design can lead to adverse tax consequences. The considerations described here add another layer of complexity the sponsor must be aware of in addition to the securities compliance. Nevertheless, a well-thought-out offering with a strong team around a fund manager can successfully launch and maintain the fund.

About the Authors:

Beeta Lecha is a principal at Spiegel Accountancy Corp. She leads the Taxation and Fund Accounting practices. Lecha has 13 years of private equity and alternative investments experience, primarily focusing on private lending and real estate funds. In addition to fund accounting and investor reporting, Lecha provides tax strategy, tax planning and tax compliance for fund managers and real estate investors. Lecha is a member of the American Institute of Certified Public Accountants (AICPA) and the California Society of CPAs (CALCPA). She serves on the Education Advisory Committee of the American Association of Private Lenders (AAPL).

Tae Kim is a corporate and securities attorney at Geraci LLP, AAPL’s general counsel, whose practice involves advising clients on securities compliance in private and public offerings, fund designing and preparing offering documents. Kim and the Corporate and Securities team work closely with clients to establish mortgage funds, real estate acquisition funds, syndications, real estate investment trusts (REITs) and Qualified Opportunity Funds.

Nate Ashley is a fund accounting supervisor at Spiegel Accountancy Corp. He provides accounting and consultation services to private lending and nonperforming note funds. Ashley works with distressed debt fund managers on mitigating issues related to non-cash income and the valuation of foreclosed assets.



Auditing Standards Board Agrees to Defer SASs 134-140 For One Year

The Auditing Standards Board just issued Statements on Auditing Standards 141, which delays required implementation changes to auditor’s reports for audits and employee benefits plans from reporting periods ending from December 15, 2020 to December 15, 2021, with early adoption permitted.

These new reporting standards will change auditor’s reports and management’s responsibilities as follows:

Statement on Auditing Standards (SAS) 134, Auditor reporting and amendments, including amendments addressing disclosures in the audit of financial statements: The new standard makes significant changes to the layout and information to be included in the auditor’s report.  The new audit report will also provide for the option to report on key audit matters in the body of the report. The SAS standard was developed to better align reporting standards with those of the international and public company auditor reporting standards.

SAS 136, Forming an opinion and reporting on financial statements of employ benefit plan subject to ERISA: The new standard provides changes similar to those of SAS 134 to be included in the auditor’s report and will also eliminate the “disclaimer of opinion” as well as the reference to limited scope audits. The standard will also provide clarification on management’s required representations and responsibilities.

We will contact our clients to discuss how the additional auditor’s opinion requirements may be beneficial to the company’s overall financial statement reporting.

Spiegel is Working to Support Feeding America

Spiegel has teamed up with Feeding America in its effort to assist the millions of newly unemployed people in our communities who are turning to food pantries for help.

Your gift of $50, $75, $100, or whatever you choose to provide will help support local food banks in the Feeding America network as they work to meet the increased demand. Please give today.

Feeding America, the nation’s largest domestic hunger-relief organization, with a network of 200 member food banks across the country, established the COVID-19 Response Fund to help food pantires across the country as they support communities impacted by the pandemic.

The $2.65 million fund will enable food banks to secure the resources they need to serve the most vulnerable members of the community during this difficult time. Still, it is impossible for the Feeding America network to address this pandemic without public and government support, so that food banks can do what they do best — feed people in need within their communities.