2020/21 Reporting Season: find the help you need
Help from ICAEW to assess the impact of COVID-19 and Brexit on businesses and the implications for 2020/21 financial reporting.
COVID-19 is having a devastating effect on people’s health, way of life and the economy. Many businesses are suffering from the consequences of the pandemic as it continues to affect their ability to trade. Some will be seeking new opportunities and perhaps investing while success is particularly uncertain.
Directors will need to consider how to reflect the impact of COVID-19 on not just the numbers but also the disclosures in the financial statements. Also, they should be mindful of the risk that COVID-19 is used as an opportunity by some reporting entities to bury bad news with 'big bath' or 'kitchen sink' provisions.
To help navigate the impact of COVID-19 on businesses, ICAEW has prepared six key business questions. These can be asked by management or their auditors to enable a conversation about the big-picture factors affecting a business this year. The questions provide a bridge into detailed accounting consequences (see below) but can also be used to keep perspective and a focus on the most material issues. This bridge is not intended as a disclosure checklist but rather to highlight factors to consider and resources to help provide a path through to robust reporting for 2020/21, avoid last-minute surprises, and ensure reporting is fair, balanced and understandable.