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COVID-19 news

This year, preparers face the additional demands of producing high-quality reports against the backdrop of the effects of the COVID-19 pandemic and its economic consequences. In a continually changing and uncertain economic environment, both the FRC and ESMA highlight the importance of entity-specific and transparent disclosures regarding the impact that COVID-19 has had on the performance, position and cash flows of the entity. The FRC’s Annual Review of Corporate Reporting, its letter to Audit Committee Chairs and Finance Directors, and ESMA’s Common Enforcement Priorities provide guidance on appropriate reporting and meeting investor expectations during the pandemic and highlight other areas of regulatory scrutiny that reporters of all sizes should focus on in the coming reporting season.  Recent Lab reports also highlight investor expectations for reporting in the current environment.  In particular the FRC expects disclosures to:

  • Clearly describe the impact of COVID-19 on the company’s position and performance with quantification where possible.
  • Include relevant sensitivities or ranges of possible outcomes where judgements are made on significant estimation uncertainties
  • Quantify the historical effect of COVID-19 in narrative reporting in the strategic report. In doing so companies are ‘strongly encouraged’ not to disclose arbitrary splits of items between COVID-19 and non-COVID-19 but instead apply existing accounting policies for exceptional items.
  • Clearly articulate the impact of COVID-19 on their business and strategies using consistent assumptions to those used in other areas such as going concern, viability, impairment testing and recognition of deferred tax assets.
  • Disclose any significant judgements made in determining whether or not there is a material uncertainty in relation to going concern to be disclosed and explained.
  • Describe and explain any other significant judgements and estimates made especially with regards impairment reviews.

This page includes all of our news on the financial reporting impacts of COVID-19.

Related news

CIPFA/LASAAC consult on changes to the Code of Practice on Local Authority Accounting in relation to accounting for secure housing tenancies and COVID-19-related rent concessions

19 Jan 2021

The Chartered Institute of Public Finance and Accountancy (CIPFA) and the Local Authority (Scotland) Accounts Advisory Committee (LASAAC) are seeking comments on proposed changes to the Code of Practice on Local Authority Accounting in relation to accounting for secure housing tenancies and COVID-19-related rent concessions.

FRC releases podcast reflecting on the FInancial Reporting Lab's work in 2020

08 Jan 2021

The Financial Reporting Council (FRC) has released a podcast which reflects upon the work of the Financial Reporting Lab (the Lab) in 2020.

ICAEW publishes guide highlighting key considerations for the 2020/21 reporting season

18 Dec 2020

The Institute of Chartered Accountants in England and Wales (ICAEW) Financial Reporting Faculty has published a guide highlighting key areas that preparers should focus on in the forthcoming reporting season.

FRC publishes consolidated covid-19 guidance for companies and auditors.

14 Dec 2020

The Financial Reporting Council (FRC) has published consolidated COVID-19 guidance for companies and auditors. The consolidated guidance supersedes all previous FRC guidance for companies and auditors.

FRC announces thematic reviews and priority sectors for 2021/2022

11 Dec 2020

The Financial Reporting Council (FRC) has announced its corporate reporting and audit quality review programme for 2021/22 alongside its priority sectors for review.

FRC highlights importance of a challenge culture in audit firms

11 Dec 2020

The Financial Reporting Council (FRC) has undertaken a new analysis of its audit quality inspection results over the last two years to identify recurring themes requiring audit firms’ attention.

Financial Reporting Lab publishes its final newsletter for 2020

11 Dec 2020

The Financial Reporting Lab ("the Lab") has published its Q4 newsletter providing highlights of its activities in the fourth quarter of 2020.

Deloitte IFRS Masterclass 2020

07 Dec 2020

On 8-10 December 2020, Deloitte Middle East offers the IFRS Masterclass 2020 as an online event. There is no charge for attending, however, prior registration is required.

FRC publishes results of review of audit firms going concern assessments

27 Nov 2020

The Financial Reporting Council (FRC) has completed a review of the Audit of entities going concern assessments across the seven largest UK audit firms and documented its key findings.

FRC highlights continued errors in the preparation of cash flow statements

20 Nov 2020

The Financial Reporting Council (FRC) has published the results of its thematic review of corporate reporting in relation to IAS 7 ‘Statement of Cash Flows’ and the liquidity disclosure requirements in IFRS 7 ‘Financial Instruments: Disclosures’.

FRC publishes year-end advice to Audit Committee Chairs and Finance Directors in advance of the 2020/21 reporting season

14 Nov 2020

The Financial Reporting Council (FRC) has published a letter to Audit Committee Chairs and Finance Directors, in advance of the 2020/21 reporting season, setting out its expectations for preparers of reports and accounts for the coming year.

FRC publishes Developments in Audit 2020 report

14 Nov 2020

The Financial Reporting Council (FRC) has published their annual developments in audit report 2020.

FCA Policy Statement delays ESEF implementation and extends publication deadlines for listed companies

10 Nov 2020

The Financial Conduct Authority (FCA) has published Policy Statement (PS) 20/14. The Policy Statement sets out the FCA’s decision to delay by one year mandatory requirements related to the European Single Electronic Format (ESEF). The Policy Statement also provides an update on extending deadlines for the publication of financial statements by listed companies in response to COVID-19.

IPSASB delays effective dates

09 Nov 2020

The IPSASB has published 'Covid-19: Deferral of Effective Dates' delaying the effective dates of recently published standards and amendments by one year to 1 January 2023. The amendment is a response to the global COVID-19 pandemic and intended to provide stakeholders with additional implementation time.

Financial Reporting Lab publishes third newsletter of 2020

02 Nov 2020

The Financial Reporting Lab ("the Lab") has published its third newsletter of 2020.

Article on the impact COVID-19 might have on applying IFRSs

28 Oct 2020

IASB Board member Mary Tokar and technical staff member Sid Kumar have released an article that provides an overview of the key financial reporting considerations associated with COVID-19.

ESMA announces enforcement priorities for 2020 financial statements

28 Oct 2020

The European Securities and Markets Authority (ESMA) has announced the priority issues that the assessment of listed companies' 2020 financial statements will focus on. A special focus is on COVID-related matters.

ICAEW publishes going concern considerations guide for FRS 105 reporters

23 Oct 2020

The Institute of Chartered Accountants in England and Wales (ICAEW) has published a guide on going concern considerations for FRS 105 reporters.

FRC publishes findings on the quality of corporate reporting in 2019/2020

21 Oct 2020

The Financial Reporting Council (FRC) has published its Annual Review of Corporate Reporting 2019/2020, which provides the FRC's assessment of corporate reporting in the UK based on evidence from a variety of sources, including the work of the FRC's own Corporate Reporting Review (CRR) team. The report sets out the FRC’s expectations of areas of corporate reporting that require improvement and what it expects companies to focus on in the coming reporting season. The FRC expects companies to consider its findings during the financial reporting process.

FRC amends FRS 100, FRS 101, FRS 102, FRS 104 and FRS 105

20 Oct 2020

The Financial Reporting Council (FRC) has issued ‘Amendment to FRS 101 – Effective date of IFRS 17’, ‘Amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime - COVID-19-related rent concessions' and ‘Amendments to FRS 104 Interim Financial Reporting - Going concern'.

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