Accounting considerations related to coronavirus disease 2019
12 Mar, 2020
Global responses to the coronavirus disease 2019 (COVID-19) outbreak continue to rapidly evolve. COVID-19 has already had a significant impact on global financial markets, and it may have accounting implications for many entities.
Some of the key impacts include, but are not limited to:
- Interruptions of production.
- Supply chain disruptions.
- Unavailability of personnel.
- Reductions in sales, earnings, or productivity.
- Closure of facilities and stores.
- Delays in planned business expansions.
- Inability to raise financing.
- Increased volatility in the value of financial instruments.
- Reduced tourism, disruptions in nonessential travel and sports, cultural and other leisure activities.
In addition, entities should consider the increasingly broad effects of COVID-19 as a result of its negative impact on the global economy and major financial markets.
Entities must carefully consider their unique circumstances and risk exposures when analysing how recent events may affect their financial reporting. Specifically, financial reporting and related financial statement disclosures need to convey all material effects of COVID-19.
The FRC has recently issued advice on this matter which is available here.
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