DELOITTE: "FINANCIAL REPORTING CONSIDERATIONS RELATED TO COVID-19 AND ECONOMIC DOWNTURN".
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Date of Publishing: September, 2020.
As COVID-19 continues to spread globally, it may be appropriate for entities to consider the impact of the outbreak on accounting conclusions and disclosures related to, but not limited to, the following:
• Impairment of non-financial assets (including goodwill). • Valuation of inventories. • Allowance for expected credit losses. • Fair value measurements. • Onerous contracts provisions. IFRS in Focus 2 • Restructuring plans. • Breach of loan covenants (including impact on the classification of liabilities as current vs non-current). • Going concern. • Liquidity risk management. • Events after the end of the reporting period. • Hedging relationships. • Insurance recoveries related to business interruptions. • Employment termination benefits. • Share-based compensation performance conditions and modifications. • Contingent consideration in contractual arrangements. • Modifications of contractual arrangements. • Tax considerations (in particular, recoverability of deferred tax assets).
The ultimate recognition of accounting impacts related to these issues will vary depending on each entity’s specific facts and circumstances. However, the following accounting areas may be more likely to be affected as a result of the COVID-19 outbreak.
Appendix A - Industry-Specific Insights
Appendix B - Entities Reporting Under IRS Standards.
Appendix C - Deloitte Contacts and Acknowledgements.
Appendix D - Questions in DG Topic 9 and 9A.
Appendix E - Summary of Changes.
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