COVID-19 | Financial reporting

The World Health Organisation has declared the COVID-19 coronavirus outbreak to be a pandemic. Many governments are taking stringent steps to contain and/or delay the spread of the virus. 

Actions taken in response to the spread of COVID-19 have resulted in significant disruption to business operations and a significant increase in economic uncertainty, with more volatile asset prices and currency exchange rates, and a marked decline in long-term interest rates in developed economies.

In addition, oil prices have declined dramatically after OPEC and Russia were unable to agree on production cuts at their March 2020 meeting.

These events and conditions create a level of uncertainty and risk that companies may not have encountered before, and may result in significant financial reporting implications for preparers of financial statements. This resource centre focuses on the potential financial reporting impacts for 2020 period ends. 

The FAQs below can help you better understand the potentially significant accounting and disclosure implications for your company, and the actions management can take now.

This resource centre will be continually updated as other significant accounting and reporting issues arise, so we encourage you to bookmark this page and check back frequently for updates.

• Do events or conditions cast significant doubt on the company’s ability to continue as a going concern?

• Are government grants recognised in the right period and appropriately measured?
• How should companies account for different forms of government assistance?

• Has COVID-19 resulted in an unavoidable liability or a loss-making contract?
• When is the right time to recognise a restructuring provision?

• Have there been changes to employee benefits and employer obligations?

• Are customer contracts still enforceable?
• Are revenue estimates up to date – e.g. variable consideration, measure of progress?

• How should companies account for rent concessions?
• Have expectations around lease renewal, termination or purchase options changed?