What are the financial reporting implications of COVID-19?
6 April 2020: Although the immediate focus for many companies is accessing the lifeline of cash from the various government support schemes, the financial reporting implications of COVID-19 also need to be considered.
To outline the potential impact of COVID-19 on financial statements and highlight the latest advice around filing deadlines, ICAEW’s Financial Reporting Faculty has recorded a 20-minute webcast, which is available to all.
Aimed primarily at those reporting under FRS 102, Tessa Park, technical partner at Moore Kingston Smith, and Sally Baker, technical manager in ICAEW’s Financial Reporting Faculty,
discuss how companies may apply for a filing deadline extension, and how changing year-end might also be considered by some.
The webcast covers the three key areas likely to have the most significant impact, namely post-balance sheet events, going concern and impairment of assets. The advice recently issued by Companies House enabling companies to apply for an automatic and immediate three-month extension to their filing deadline is also covered. Baker also explained that another option is to lengthen the accounting period. This may be appropriate for some companies, but she cautioned that the full implications of doing this will need to be considered carefully.
Each entity will need to consider the implications on a case-by-case basis, explained Park, with the impacts varying depending on where the company does business and in which sector it operates. The impact will also vary depending on a company’s year-end. For those with 31 December year-ends, the impact will largely be on disclosures, while for those with 31 March year-ends there is likely to be more impact on the measurement of assets and liabilities which may be significant for some.
In addition to the webinar, the Financial Reporting Faculty has produced an online guide The financial reporting implications of coronavirus under UK GAAP. Dedicated financial reporting-related resources, including links to guidance issued by regulators and other external sources, is available through ICAEW’s Coronavirus hub.
- Bitesize Briefing: COVID-19 and financial reporting implications
- Financial reporting guidance relating to coronavirus