This is the Journal of Accountancy podcast's last episode of 2021. The guests in this episode are Lisa Simpson, CPA, CGMA, vice president–Firm Services at the Association of International Certified Professional Accountants, and Floyd Amuchie, CPA, the corporate controller at Virgin Galactic.
Simpson provides an update on the status of several business relief programs and a look ahead to 2022 areas of focus for the AICPA Town Hall Series. Amuchie, who recently attended the Future of Finance Summit in Nashville, Tenn., shares a few lessons learned from the event (hear a previous JofA episode for more from Nashville).
Also, get a quick preview of what the 2022 mileage rate will be for taxpayers to compute their deductible automobile costs.
What you'll learn from this episode:
- An overview of business relief programs, including the Paycheck Protection Program.
- Focus areas in 2022 for the AICPA Town Hall series, which can be seen on YouTube or heard on its own podcast.
- Amuchie's explanation of Virgin Galactic's goals and some of his takeaways from the Future of Finance Summit.
- A reminder from Amuchie about reflecting on 2021.
Play the episode below or read the edited transcript:
To comment on this episode or to suggest an idea for another episode, contact Neil Amato at Neil.Amato@aicpa-cima.com.
Neil Amato: Hello and welcome to the Journal of Accountancy podcast. We're going straight to the news in this episode as we enter the final days of 2021. The IRS issued its annual update of the mileage rate taxpayers may use to compute their deductible automobile costs. The rate for 2022 is 58.5 cents per mile, up 2.5 cents from the 2021 rate. We will also have a conversation on business relief programs and one CPA leader's message of reflection.
Welcome back to the Journal of Accountancy podcast. This is your host, Neil Amato. This segment is an interview with Lisa Simpson, who is Vice President—Firm Services with the Association of International Certified Professional Accountants. Lisa is a CPA who holds the CGMA designation, and she's here to talk about the future of business relief programs and the AICPA Town Hall Series, which by the way has its own podcast, which we'll mention later on in the episode. Lisa, first, welcome to the podcast. Thank you for being here today.
Lisa Simpson: Thank you so much. Glad to be here.
Amato: First, where do things stand on major government funding programs, which provided hundreds of billions of dollars to US businesses to help weather COVID-19? Are there programs still open and offering loans or grants? What's the status?
Simpson: It's a great question, and I'll start throwing out some acronyms, but I'll try to define those as we go. Let's start with the Paycheck Protection Program, which is one I'm sure so many of you are familiar with. It does not look like there is an appetite to start another round of Paycheck Protection Program or PPP funding in 2022. We do believe that that program is done, other than the forgiveness, which we can talk about it in a minute.
Also, a lot of borrowers have been using the EIDL program, which is the Economic Injury Disaster Loan Program. That was an existing SBA program. They modified a lot of the rules around COVID-19 to provide specific loan attributes for that program. That will end on December 31. The regular EIDL still exists and can be an opportunity for borrowers who maybe weren't able to take advantage of PPP or some of the other programs and still are looking for other ways to finance extenuating operations, that may still be an avenue open to them.
We have the Shuttered Venue Operators Grant, which I affectionately call the SVOG, just because that's fun. That program was not fully utilized in its first round of applications. We don't see a huge demand right now for that program to be reopened or re-funded. However, as with everything about this pandemic, that is subject to change as we see new COVID variants coming into play that may impact live performances.
We also have the Restaurant Revitalization Fund. That one was originally funded by Congress with $28 billion and that money was allocated very, very quickly. There has been a continuing ask by several constituencies to re-fund the program. But at this point, again, depending on what happens with the next variant of COVID, we aren't seeing that being actively worked into any pending legislation. However, there is still a lot of demand for it.
Then we've got the Employee Retention Credit, which sunsetted September 30, 2021. That was controversial because it didn't actually get passed into legislation to sunset until November. So, some confusion around that and still some uncertainty as to whether or not that could possibly be reinstated. But the forecast for that right now is murky.
Amato: Yeah, and that's a good point. At this recording, that's the state of the ERC, and we are recording in mid-December. On that, how is the PPP forgiveness process going? Are most loans being forgiven or are a lot of them outstanding?
Simpson: We're seeing a lot of movement with the 2020 loans. As of December 12th, the latest data that the SBA had made available, as of our recording date, 94% of those 2020 loans had been submitted for forgiveness. Forgiveness rates are looking strong, depending on the loan amount, there are between 98% and 99.3% being totally forgiven. There's some great progress there.
2021 loans are going a little slower; 67% of those loans have been submitted for forgiveness. I think the forgiveness rates for those actually are even a little better than 2020 loans. Again, depending on the loan amount, they're ranging between 99.8% and 100% forgiveness. Forgiveness is going well, I think, despite the initial confusion in how funds can be used, changes in COVID periods, and legislative changes as program developed. A lot of the borrowers did use those funds for their intended purposes and are achieving almost full forgiveness.
Amato: One reason that the AICPA Town Hall Series grew rapidly in popularity in 2021 was because of you and others being able to provide nearly real-time updates on the PPP, or Paycheck Protection Program. Now that that program is essentially winding down, what are some of the focus areas for Town Halls in 2022?
Simpson: Well, first of all, let me say that we have a great team behind those of us that you see on the Town Halls that help get all of that real-time information that you talked about. As we move forward, we want to continue to provide the latest information that we can around issues impacting the profession. In the first part of 2022, we expect there'll be a lot of legislative movement. We want to make sure that that Town Hall forum is there to keep you up-to-date so that as you're trying to do your own tax planning or as you're working with your clients, you know what's going on from a legislative standpoint.
But we also want to take the opportunity to talk about what we're seeing in the profession on a broader scale. We'll be talking about practice management strategies, CPA Evolution, and also just continuing to give you those economic updates that you've come to expect, bringing in practitioners of all firm sizes to talk about what they're hearing, what they're seeing, and just bringing some of those best practices to our Town Hall attendees.
Amato: We will link to the Town Hall series, both the video and their podcast. We appreciate you, Lisa, for coming on the podcast. Thank you very much.
Simpson: Thank you, Neil.
Amato: Again, that was Lisa Simpson. Next up is a conversation with a leader I connected with in Nashville on December 10th. It was a quick, key-takeaways conversation, after the Future of Finance Summit concluded.
Joining me for this segment of the Journal of Accountancy podcast is CPA Floyd Amuchie. Floyd is the corporate controller for Virgin Galactic. Now, I believe if you've heard the company name Virgin Galactic, you know who they are. But Floyd, if you could first tell us briefly what Virgin Galactic does.
Floyd Amuchie: Our mission really is to expand access to space. We really want to take as many people as possible, to enjoy the unique experience of going to space and space tourism. Really, that's what we're trying to do, get everybody up into the stars essentially.
Amato: You were a part of this Future of Finance Summit. What made you want to come here, and how do you feel like you maybe got some takeaways, some things that you can apply and take back with you in your role?
Amuchie: Tom [Hood] reached out to me. He really gave me a good overview of what people wanted to accomplish here. I really wanted to come and just understand what others' perspectives are on, what the future holds for our profession, people in the future, how we can have a big part to play. What I've taken so far, I think the biggest takeaway is definitely, how do we continue to add value as a finance function?
There's been a lot of change over the last few years. There's a lot of different industries that are being "disruptive." How does finance help people continue to progress, continue to grow with the changes that are happening? There were few good ideas here that I've taken and that I'm going to employ back at Virgin. I've definitely gotten a lot from the summit so far.
Amato: Obviously, technology in and of itself, you guys are a tech company if there ever was one. It's always going to be part of the jobs that finance professionals do and really everyone. But one thing I heard that stuck out to me, I'd like you to respond to is, "Technology is not going to take the place of creativity." What do you think about that?
Amuchie: What that means to me is essentially, the stuff that we can automate, we will and we should. Those are the more repetitive processes that we have, things that are just easy to replicate. But a lot of the more strategic, more forward-thinking, more creative aspects to the job. Those are things that you can't really automate. That's human intelligence that we need for that. I think what that means is as we grow as a function, we have to transition away from those processes that are good candidates for automation, to do more of the value-add type strategic thinking, pushing the enterprise forward.
Amato: Really looking ahead to 2022, Floyd, anything you'd like to add in closing?
Amuchie: I would definitely want, I think everyone, to reflect on how resilient they've been over the past two years and really celebrate that because there's been a lot. I think one thing that really was attained here was, we've made it, through some pretty tough times, and we should really stop and think about that and celebrate that. Hopefully towards the end of the year, we can reflect and celebrate the progress we've made.
Amato: Again, thanks to Floyd Amuchie for that message, and for his time in Nashville, at the conclusion of the Future of Finance Summit. You'll hear more voices from that group of finance leaders in 2022 episodes of the Journal of Accountancy podcast.
This is our last episode of 2021. We hope you can spend the holidays with people you care most about. Take time to reflect, and also time to recharge, and rejuvenate. We thank you, the listener, for continuing to engage with the show. We look forward to more conversations in the new year.