The objective of the document is to indicate the accounting implications of COVID-19-related government initiatives, including how IPSAS and other IPSASB guidance deal with transactions and events which arise because of the pandemic. The publication does not constitute an authoritative pronouncement of the IPSASB, nor does it intend to amend, or override the requirements of existing IPSAS or provide further implementation guidance.

Review the guide on the IPSASB's website.

However, to effectively oversee financial reporting, the audit committee would still need to have access to all relevant risk management information—but maybe some of the detailed oversight can shift to allow the audit committee more time to focus on its core role.

Review the blog on the NACD's website.

The statement notes that the responsibility for developing and maintaining high quality standards resides with the IASB and welcomes the IASB's recent educational material that addresses the application of accounting for expected credit losses in accordance with IFRS 9, Financial Instruments during the period of economic uncertainty arising from the COVID-19 outbreak. IOSCO also notes that the related financial instruments principles-based disclosure requirements in IFRSs (i.e. IFRS 7, IAS 1) should result in disclosure that considers the impact of the important emerging issues.

Review the statement on the IOSCO's website.

"The COVID-19 crisis is having a significant impact on investors, issuers, and auditors alike," said Chairman William D. Duhnke III. "This Spotlight is intended as a reminder that adherence to our standards takes on added importance as investors depend now, more than ever, on the integrity of financial statements."

Review the following on the PCAOB's website:

• COVID-19: Reminders for Audits Nearing Completion Spotlight
• PCAOB's response to COVID-19 resource page

In speaking about future developments, companies can deprioritize issues and engagement not related to COVID-19, which is the topic most important to investors in this moment. As stated by one major investor group, such engagement “should be postponed where not related to COVID-19 to allow management and boards the ability to focus on crisis management.”

To help directors and their management teams understand the current landscape of COVID-19 risk disclosure, NACD mined data from MyLogIQ—Multidimensional Public Company Intelligence to identify trends in 10-K filings from January 1 to March 30, 2020 using the search terms “coronavirus” and “COVID-19.”

Review the blog on the NACD's website.

The research on Covid19 is changing rapidly and flattening the curve has quickly become a widely known strategy to reduce the peak demand on healthcare thanks to very important and public work of dedicated teams of epidemiologists around the world. The goals tend to be to first to bring the caseload under initial control and then manage a long-term return to normal while minimizing both death rates and economic impact. More specifically comparing and contrasting strategies such as (a) mitigation, which focuses on slowing but not necessarily stopping epidemic spread (having the so-called reproduction number R0 small but larger than 1), and (b) suppression, which aims at reversing epidemic growth, thus reducing case numbers to low levels (R0 smaller than 1). Indeed, NPI’s can be implemented that change R0 in order to control epidemic spread. What we are proposing is a systematically designed feedback strategy to change R0 through modulation of NPI’s.

Review the blog on IFAC's website.

The document is intended to support the consistent application of requirements in IFRS Standards. Therefore, it highlights requirements within IFRS 9, Financial Instruments that are relevant for companies considering how the pandemic affects their accounting for expected credit losses; it does not change, remove nor add to, the requirements of IFRS 9.

Review the press release and document on the IASB's website.

Section 4014 of the CARES Act offers optional temporary relief from applying the FASB’s current expected credit losses (CECL) standard (ASU 2016-13) for certain entities. Any guidance developed by the SEC or FASB to address the CARES Act’s impact on US GAAP would most likely take into account both the scope and length of any optional deferral, will likely take into account whether any deferral should apply to all entities that were otherwise required to adopt the CECL, and would more clearly define the date of adoption if an entity chose the deferral. For more information, see Deloitte's related Heads Up newsletter as well as the CARES Act, which is available on the US Senate's website.

Other than US Senate and Congress, the IASB has concluded that the existing requirements within IFRS 9, Financial Instruments (including the IASB's CECL model) need not be changed, removed nor added to. On Friday, the IASB only released a statement to support the consistent application of requirements in IFRS 9.

The IASB's position is supported by several other communications on the application of IFRS 9 during the COVID-19 crisis.

• The Office of the Superintendent of Financial Institutions (OSFI) in Canada has released a statement that includes guidance on Applying IFRS 9 in extraordinary circumstances that will allow companies to remain compliant with IFRS as issued by the IASB
• the Prudential Regulation Authority (PRA) of the Bank of England has released a statement Covid-19: IFRS 9, capital requirements and loan covenants that offers an annex with guidance consistent with IFRS 9 to assist firms in making well-balanced and more consistent ECL estimates and in determining how to treat payment holidays and similar schemes for accounting and regulatory purposes

All statements agree that IFRS 9 is principles-based and requires the use of experienced credit judgement and that the current situation does not lead to an undifferentiated, automatic transfer of financial instruments from Level 1 to Level 2 or even Level 3.

Earlier last week, ESMA already concluded that the principles-based nature of IFRS 9 includes sufficient flexibility to faithfully reflect the specific circumstances of the COVID-19 outbreak and the associated public policy measures.

These measures, along with the delays of previously planned regulatory changes, are designed to help reduce some of the operational stress on institutions. They also ensure that OSFI’s guidance is appropriate for these extraordinary circumstances while remaining risk-focused and forward-looking.

In addition to these regulatory adjustments, OSFI provided application guidance on three aspects of accounting for ECL in extraordinary circumstances: significant increase in credit risk, reasonable and supportable forward-looking information, and disclosure. This guidance is consistent with the requirements in IFRS 9 and should be considered along with the guidance provided by the IASB on the application of the standard in relation to COVID-19.

Review the press release and guidance on the OSFI's website.

The COVID-19 pandemic is a global health and humanitarian crisis. Beyond the significant challenges that lay ahead in all facets of life, the pandemic has the potential to significantly impact the way that audits are undertaken.

Review the following on the IAASB's website:

• Press release
• COVID-19 web page
• Audit considerations arising from changes due to COVID-19