Under Va. Code Ann. 58.1-340(C), the taxpayer's method of accounting must be the same for state tax purposes as for federal tax purposes. Therefore, the PPP loan forgiven in 2021 should appear as a liability on the balance sheet as of December 31, 2020 on both Federal and Virginia tax returns.

 "[T]he VA addback does need to be recognized in 2020." Can you please explain the reason for this statement?