Management, with the oversight of those charged with governance, is responsible for the preparation of the financial statements. As the uncertainty in the future economic outlook continues, management faces ongoing challenges in the preparation of the financial statements such as increases in estimation uncertainty.
Some financial reporting areas to consider include:
- Management’s assessment of whether the going concern assumption is appropriate and takes into account the most recent forecasts and expectations of future business activities, including disclosures about substantial doubt or when a material uncertainty exists.
- Alternative methods, significant assumptions or sources of data used by management in assessing the effect of estimation uncertainty as part of developing estimates and analyzing impairment of intangible assets.
- Impact of contract modifications such as amendments to the terms of debt agreements, waivers on debt covenants, or rent concessions.
- Fair value measurements, particularly of financial instruments and investment property to determine that the value reflects the conditions at the date of the financial statements.
- Financial assistance received (or planning to receive) from government stimulus programs and the appropriate accounting treatment, for example whether the financial assistance needs to be spent on a particular activity like payroll.
The below resources provide additional guidance related to financial reporting and challenges finance teams may face due to the impact of COVID-19.
- COVID-19 Accounting for lease modifications [ 162 kb ]
- COVID-19 Accounting for government grants [ 122 kb ]
- COVID-19 Accounting considerations for CFO’s: Debt modifications [ 161 kb ]
- COVID-19 Going concern considerations [ 114 kb ]
- COVID-19 Events after the reporting period [ 147 kb ]
- COVID-19 Revenue recognition [ 91 kb ]
- COVID-19 Hedge accounting insights [ 128 kb ]
- COVID-19 Intangible assets and goodwill [ 206 kb ]
- COVID-19 Using alternative performance measures [ 175 kb ]
- Understanding the impact of COVD-19 on your deferred tax provision [ 123 kb ]
- Navigating the changes to International Financial Reporting Standards (2021 edition) [ 1503 kb ]
- Reporting the impact of COVID-19 on your business [ 110 kb ]
- COVID-19 Financial reporting and disclosure [ 195 kb ]
- Telling the COVID-19 Story [ 5912 kb ]
- IFAC: Summary of COVID-19 Financial reporting considerations