COVID-19 video series

The Coronavirus Disease 2019 (COVID-19) pandemic is affecting economic and financial markets, and virtually all industries are facing challenges associated with the economic conditions resulting from efforts to address it. As the pandemic increases in both magnitude and duration, entities are experiencing conditions often associated with a general economic downturn.

This series of webcasts discusses certain key IFRS accounting considerations related to conditions that may result from the COVID-19 pandemic.

The significance of the individual issues discussed in the webcasts will of course vary by industry and by entity, but we believe that the topics of the webcasts will be the most pervasive and difficult to address.

Related Publications

Accounting considerations in response to COVID-19 — Leases

14 Jul, 2020

COVID-19 has led many lessors to provide 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 also be as a consequence of a government encouraging or requiring that the relief be provided. IFRS 16 requires lessees to assess whether changes to lease contracts are lease modifications as this term is defined in the Standard and, if so, the lessee must remeasure the lease liability using a revised discount rate. This video explains the amendments made in response to the current economic climate.

Accounting considerations in response to COVID 19 — Profit or loss statements

24 Jun, 2020

In this webcast, we look at the presentation of COVID-19-related items in the statement of profit or loss. The impact of COVID-19 may give rise to material expense or income items for many entities, for example, restructuring provisions and impairment losses related to non-financial assets. Entities may identify and quantify such discrete items, they should be disclosed separately either in the statement of profit or loss and other comprehensive income or in the notes to the financial statements, with appropriate explanation of those amounts. Watch the video series to learn more.

Accounting considerations in response to COVID-19 — Going concern

22 Jun, 2020

Financial statements are prepared on a going concern basis unless management intends either to liquidate the entity or to cease trading, or has no realistic alternative but to do so. The effects from COVID-19 are disrupting operations of many businesses. Watch this video to learn more.

Accounting considerations in response to COVID-19 — IAS 34 — Interim financial reporting

22 Jun, 2020

An interim financial report prepared applying IAS 34 is meant to provide an update on the latest complete set of annual financial statements with a focus on new activities, events and circumstances. An entity applies the same accounting policies in its interim report as those applied in its annual financial statements except for accounting policy changes. This video explains items to consider when preparing interim financial reports applying IAS 34.

Accounting considerations in response to COVID-19 — Expected credit losses on financial assets

03 Jun, 2020

COVID-19 can affect the ability of borrowers, whether corporate or individuals, to reimburse amounts owed. Individual and corporate borrowers may have a particular exposure to the economic impacts in their geography and industry sector. The impact of COVID-19 on expected credit losses (or ECL) will be particularly challenging and significant for banks and other lending businesses. However, the effect could also be significant for non-financial corporates. This is because ECL does not only apply to loans but also applies to many investments in interest bearing financial assets.

Accounting considerations related to COVID-19 — Employee benefits

18 May, 2020

Entities may be considering or implementing restructuring plans to mitigate their exposures associated with unforeseen consequences of the COVID-19 pandemic. In determining how to account for these measures, entities must start by identifying the nature and characteristics of each proposed compensation plan because it may affect the timing of the recognition of the benefits provided to employees. Learn more about how to account for employee benefits in response to COVID-19 in this video.

Accounting considerations related to COVID-19 — Government assistance

18 May, 2020

Certain government assistance may be offered in various ways. For example, reimbursement of expenses, reduction of income taxes, or investment tax credits. As a first step in accounting for the various measures offered by a government is determining whether they should be accounted for by applying IAS 20 'Accounting for Government Grants and Disclosure of Government Assistance' or IAS 12 'Income Taxes'.

Accounting considerations related to COVID-19 — IAS 36 — Impairment of assets

29 Apr, 2020

Entities will need to assess whether the impact of COVID-19 has potentially led to the impairment of assets that are covered by IAS 36 'Impairment of Assets'. The financial performance of an entity, including estimates of future cash flows and earnings, may be significantly affected by the direct or indirect impacts of recent and ongoing events relating to the COVID-19 pandemic.

Accounting considerations related to COVID-19 — Covenants

29 Apr, 2020

This video looks at matters related to potential or actual breach of covenants. Unstable trading conditions, forced closure of businesses and shortages of cash flows in the affected regions may increase the risk that entities breach financial covenants. Entities should consider how the breach of a loan covenant may affect the timing of repayment of the related loan and other liabilities.

Accounting considerations related to COVID-19 — IAS 37 and onerous contracts provisions

28 Apr, 2020

This video discusses onerous contracts provisions related to COVID-19. At the inception of an executory contract, both parties to the contract expect to receive benefits that are equal to or greater than the costs to be incurred under the contract. Because of the impacts of COVID-19, unavoidable costs of meeting the obligations under the contract may exceed the benefits expected to be received, resulting in an onerous contract. IAS 37 'Provisions, Contingent Liabilities, and Contingent Assets' requires recognition of a provision in respect of an onerous contract.

Accounting considerations related to COVID-19 — Events after the reporting period

20 Apr, 2020

This video discusses the effect of COVID-19 on accounting after the reporting period. Since the 31st of December 2019, the events around COVID-19 have developed rapidly. In a global marketplace that is currently extremely volatile and in which major developments are occurring daily, it may be challenging for an entity to determine if an event after the end of the reporting period affects the recognition and measurement of assets and liabilities in the financial statements. When new information is obtained after the end of the reporting period, entities need to carefully assess if that information reveals a condition that existed before the end of the reporting period.

Accounting considerations related to COVID-19 — Judgements and estimates

10 Apr, 2020

This video discusses the effect of COVID-19 on accounting judgements and estimates. There is a high degree of uncertainty about the ultimate trajectory and the path and time needed for a return to a “steady state.” Entities will need to do their best to make reasonable estimates, prepare comprehensive documentation supporting the basis for such estimates and provide robust disclosure of the significant judgements exercised, the key assumptions used and, potentially, their sensitivity to change.

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COVID-19 video series

Related Publications

Accounting considerations in response to COVID-19 — Leases

Accounting considerations in response to COVID 19 — Profit or loss statements

Accounting considerations in response to COVID-19 — Going concern

Accounting considerations in response to COVID-19 — IAS 34 — Interim financial reporting

Accounting considerations in response to COVID-19 — Expected credit losses on financial assets

Accounting considerations related to COVID-19 — Employee benefits

Accounting considerations related to COVID-19 — Government assistance

Accounting considerations related to COVID-19 — IAS 36 — Impairment of assets

Accounting considerations related to COVID-19 — Covenants

Accounting considerations related to COVID-19 — IAS 37 and onerous contracts provisions

Accounting considerations related to COVID-19 — Events after the reporting period

Accounting considerations related to COVID-19 — Judgements and estimates

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Correction list for hyphenation