Ducharme Article - Impact of COVID-19 on AFS

The outbreak of Coronavirus disease 2019 (COVID-19) is having a widespread impact on the global economy. The virus has taken its toll on not just human life, but businesses and financial markets too, the extent of which is currently indeterminate. Entities (public and private sector) must carefully consider their unique circumstances, risk exposures and consider the impact the outbreak may have on their financial/accounting reporting. Specifically, financial reporting and related financial statement disclosure need to convey all material effects of COVID-19. The further development, duration and impact of the coronavirus cannot be predicted. Entities also need to know that global responses to the coronavirus disease 2019 (COVID-19) outbreak continue to rapidly evolve and these responses will continue to have an impact on all business entities, private or public sector.

Ducharme considered the current standing to identify some of the key financial reporting areas that entities (the focus being on the public sector entities) need to consider and focus on when determining the impact COVID-19 is having on their business, and on the results, financial position and disclosures in their preparation of the 2020 financial statements. This is not an exhaustive list and there may be other areas not included in this article that entities should consider as the impact will differ from one entity to another, and entities, and their auditors, have to consider the effects of the virus on their business and review them regularly. It should also be noted that these areas that are discussed have not been listed in any order of importance.

Some of considerations as to the impacts of the COVID-19 on AFS, we have those into these 3 categories:

1. Financial Statements Components (Balances)

2. Disclosures and Subsequent events

3. Other General Issues or considerations

 

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