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Need to know — Accounting considerations related to the coronavirus 2019 disease for FRS 102 reporters

Published on: 21 Jan 2021

The Coronavirus 2019 (COVID‑19) pandemic is affecting economic and financial markets with entities experiencing conditions often associated with a general economic downturn. These include, but are not limited to, financial market volatility and erosion, deteriorating credit, liquidity concerns, further increases in government intervention, increasing unemployment, broad declines in consumer discretionary spending, increasing inventory levels, reductions in production because of decreased demand, redundancies and furloughs, and other restructuring activities. The continuation of these circumstances could have a prolonged negative impact on an entity’s financial results.

This Need to know discusses certain key FRS 102 accounting considerations related to conditions that may result from the COVID‑19 pandemic. Small companies applying Section 1A of FRS 102 are subject to a more limited set of disclosure requirements. However, such companies are still required by law to ensure that their accounts give a true and fair view; additional disclosures in relation to the effects of COVID‑19 may therefore be advisable.

Updated 21 January 2021.  Key changes include clarifications on disclosures for ‘Going concern’ and ‘Liquidity risk management’, new subsections on ‘Contracts to buy/sell commodities’, added guidance for idle assets in ‘Restructuring plans’, as well as clarifications in ‘Share-based payments’, ‘Government assistance’ and ‘Distributable profits’.


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