COVID-19

Leadership during the coronavirus

Apr 29, 2020

In April 2020, the Harvard Business Review (HBR) released a series of articles on how to lead during this pandemic.

Review these articles:

How to be an inclusive leader through a crisis?

Leaders are under extraordinary pressure right now. They are expected to make decisions quickly with incomplete and rapidly evolving information. And unfortunately, being in crisis mode can cause even the most intentional and well-meaning leaders to fall into patterns of bias and exclusion. Research shows that when we’re stressed, we often default to heuristics and gut instincts, rather than making deliberate and goal-oriented decisions. And yet, leaders must prioritize inclusion right now, more than ever.

 

Build your team’s resilience — From home

To make it through the current crisis and return to a new normal, you and your team will need to be resilient. The good news is that leaders can help create the conditions that make this possible. We’ve done multiple studies with U.S. Navy recruits that show how this can best be done—and, recently, in studying how leaders are responding to the crisis, we’ve come across valuable stories of how they can achieve this even when team members are working remotely.

 

What good leadership looks like during this pandemic?

The speed and scope of the coronavirus crisis poses extraordinary challenges for leaders in today’s vital institutions. It is easy to understand why so many have missed opportunities for decisive action and honest communication. But it is a mistake to think that failures of leadership are all we can expect in these grim times.

 

The agile C-Suite

Building an agile enterprise does not mean replacing traditional operations with agile teams everywhere. Agile is primarily for innovation, and the testing and learning it involves can compromise critical operating processes. Building an agile enterprise means finding the right balance between standardizing operations and pursuing (sometimes risky) innovations.

 

Begin with trust

Trust is also one of the most essential forms of capital a leader has. Building trust, however, often requires thinking about leadership from a new perspective. The traditional leadership narrative is all about you: your vision and strategy; your ability to make the tough calls and rally the troops; your talents, your charisma, your heroic moments of courage and instinct. But leadership really isn’t about you. It’s about empowering other people as a result of your presence, and about making sure that the impact of your leadership continues into your absence.

 

The case for a Chief of Staff (CoS)

Most new CEOs pay little attention to a key factor that will help determine their effectiveness: the administrative system that guides day-to-day operations in their offices. This system ensures that leaders make the most of their limited time, that information arrives at the right point in their decision-making process, and that follow-up happens without their having to check. Many new CEOs default to the system they’ve inherited, even if it is poorly suited to their style or to the operational changes they must make. Often there’s a better way to handle the information flow necessary for a CEO to succeed—and very often a chief of staff (CoS) can play an essential role.

 

Keep your people learning when you go virtual

The COVID-19 pandemic is bound to leave behind lasting changes in the way work and business take place. Learning will be the foundation of our survival, then, for both organizations and the individuals who make them up. As the world shifts to online work and businesses struggle to reinvent themselves, organizations need to learn what kinds of new products and services will appeal to their consumers and learn how to create them. Leaders must learn how to keep a distributed workforce focused, energized, and attuned to customers’ changing needs. Whether you are a CEO, senior manager, or junior professional, if you neglect learning, you stop adapting and forego leading.

 

 

Impairment of non-financial assets

Apr 28, 2020

On April 28, 2020, the Accounting Standards Board (AcSB) released a publication on the implications of COVID-19 on the impairment of non-financial assets.

This publication provides an overview of the implications and includes a list of helpful resources to support you as you navigate your impairment assessment.

Review the publication on the AcSB's website.

Discount rates

Apr 28, 2020

On April 28, 2020, the Accounting Standards Board (AcSB) released a publication on the implications of COVID-19 on your discount rates.

This publication provides an overview on the potential effects the current situation may have on the discount rates used by companies in the various valuation techniques under IFRS® Standards.

Review the publication on the AcSB's website.

Potential impact on IFRS 13, Fair Value Measurement

Apr 28, 2020

On April 28, 2020, the Accounting Standards Board (AcSB) released a publication on how the COVID-19 pandemic continues to evolve rapidly and market-based measures like fair value are likely to change significantly and perhaps in unpredictable ways as a result.

This publication provides an overview and includes helpful resources to support you as you determine the fair value of your assets and liabilities.

Review the publication on the AcSB's website.

IASB publishes proposed amendment regarding COVID-19-related rent concessions

Apr 24, 2020

On April 24, 2020, the International Accounting Standards Board (IASB) published an exposure draft "Covid-19-Related Rent Concessions (Proposed amendment to IFRS 16)" that contains a proposed amendment that would provide lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification. Comments are requested by May 8, 2020.

 

Background

The COVID-19 pandemic has led to some lessors providing relief to lessees by deferring or relieving them of amounts that would otherwise be payable.  In some cases this is through negotiation between the parties, but can be as a consequence of a government encouraging or requiring that the relief be provided. Such relief is taking place in many jurisdictions in which entities that apply IFRS Standards operate.

When there is a change in lease payments, the accounting consequences will depend on whether that change meets the definition of a lease modification, which IFRS 16, Leases defines as “a change in the scope of a lease, or the consideration for a lease, that was not part of the original terms and conditions of the lease (for example, adding or terminating the right to use one or more underlying assets, or extending or shortening the contractual lease term)”.

The proposed amendment published today are intended to provide practical relief to lessees in accounting for rent concessions arising as a result of the COVID-19 pandemic.

 

Suggested changes

The changes proposed in ED/2020/2 Covid-19-Related Rent Concessions (Proposed amendment to IFRS 16) would amend IFRS 16 to

  1. provide lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification;
  2. require lessees that apply the exemption to account for COVID-19-related rent concessions as if they were not lease modifications;
  3. require lessees that apply the exemption to disclose that fact; and
  4. require lessees to apply the exemption retrospectively in accordance with IAS 8, but not require them to restate prior period figures (a lessee would recognize any difference arising on initial application of the amendment in opening retained earnings (or other component of equity, as appropriate) in the annual reporting period that includes the date of initial application).

The proposed amendment would not supersede the educational material recently published on the same topic, but rather the two complement each other.

The IASB is not proposing any additional relief for lessors as the current situation is not as equally challenging for lessors, as most have operating leases and even if they have lease modifications, the required accounting is not as complicated.

 

Comment period

The IFRS Foundation's Due Process Handbook sets out that 75% of the Trustees must approve comment periods shorter than 30 days. In a phone meeting on April 17, 2020, the Trustees approved a 14-day comment period. Therefore, comments on the proposed changes are requested by May 8, 2020.

 

Effective date

The Board expects to finalize the amendment to IFRS 16 by the end of May 2020 and proposes an effective date of June 1, 2020 for the final amendment (earlier application permitted, including in financial statements not yet authorized for issue at the date the amendment is issued).

 

Additional information

 

Events after the reporting period

Apr 24, 2020

On April 24, 2020, the Accounting Standards Board (AcSB) released a publication on how most companies, unless they are an essential service, are likely experiencing a material decline in their operations or are closed. This raises questions about whether they need to adjust their year-end or interim financial statements or provide additional disclosures for events after the reporting period.

This resource will help you to understand what you need to know about events after the reporting period.

Review the publication on the AcSB's website.

Income taxes

Apr 24, 2020

On April 24, 2020, the Accounting Standards Board (AcSB) released a publication on how the COVID-19 pandemic is affecting the recoverability of deferred tax assets and has introduced new government relief measures.

Entities should use professional judgment to assess how this will impact the accounting for income taxes in accordance with IFRS® Standards.

Review the publication on the AcSB's website.

AcSB Exposure Draft – Covid-19-Related rent concessions (Proposed amendment to IFRS 16)

Apr 24, 2020

On April 24, 2020, the Accounting Standards Board (AcSB) issued its Exposure Draft that corresponds to the IASB’s Exposure Draft on this topic. Comments are requested by May 8, 2020.

The AcSB would like input from Canadian respondents on the following additional question regarding the proposed amendments:

The IASB has developed the proposed amendment in accordance with its due process for application around the world. Assuming the Exposure Draft proposal is finalized and approved by the IASB in accordance with its due process, do you think that the proposal is appropriate for application in Canada? If not, please specify which aspects of the proposal, and what circumstances, make the accounting requirements proposed in the Exposure Draft inappropriate.

Review the press release and exposure draft on the AcSB's website.

Potential impact on lease accounting

Apr 22, 2020

On April 22, 2020, the Accounting Standards Board (AcSB) released a publication on how the COVID-19 pandemic is affecting the ability of organizations to collect and pay rent and other lease obligations.

This means companies should use professional judgement and consider the potential implications that COVID-19 could have relating to the accounting for leases under IFRS 16, "Leases".

Review the publication on the AcSB's website.

Going Concern and Liquidity Risk

Apr 21, 2020

On April 21, 2020, the Accounting Standards Board (AcSB) released a publication on the impact of the COVID-19 pandemic on the ability to continue as a going concern or liquidity risk.

This guide covers the impact of COVID-19 on the financial statements.

Review the publication on the AcSB's website.

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