Financial Reporting in the Age of Covid-19

Covid was and is a significant event and its effect on the world and economies is not yet clear.

Financial Statements are meant to truly and faithfully report the past, and with many accounting standards having forward-looking requirements, they are meant to at least consider the future. There are no new “Covid” accounting standards however there have been a very few amendments and relaxations to some calculations and more so disclosures.
So what do we have to consider? The answer is the rigorously compliant application of the existing FRS 102 and IFRS standards.

This one hour session looks at the key areas that must be considered and the calculations and disclosures required to ensure a “true and fair view” in these most uncertain times.

Examples of what might be done and actions to be taken are included in the notes to the session. Again this should not be a new approach but the joint pressures of the FRC having to show its teeth and the fact that the Covid effect is for the most part negative as regards income, profits and net asset values means that all of us involved with financial statements need to be alert – to the demands of the standards.

The most obvious standards are the ones that deal with the application of the “going concern concept”. This triggers review of standards relating to measurement and disclosure – in particular of Impairment sand provisions. The material amount of government assistance requires a review of the standards covering Grants and Financial instruments - Loans.

Finally, particularly with the extension of Companies House filing deadlines ,there are likely to be significant calculations or at least disclosures of Events after the end of the Reporting Period.

Aims & objectives:

• Going concern GC– or not. The evidence needed to support using the GC basis.
• Impairment - From a balance sheet perspective this leads to thorough identification, testing and measurement of impairment of assets
• Provisions - the need to consider and fully report ( but not overstate) liabilities
• Accounting for government assistance - not new accounting but assistance in the form of grants and guaranteed loans brings, possibly new for many, P&L and Balance sheet accounting and new and extended disclosures.
• Consideration of Events after the end of the Reporting Period