Need to know - September 2020 (Accounting considerations related to the Coronavirus 2019 disease for FRS 102 reporters)
Updated on 21 January 2021
As the pandemic increases in both magnitude and duration, entities
are experiencing conditions often associated with a general economic downturn. This
includes, but is not limited to, financial market volatility and erosion,
deteriorating credit, liquidity concerns, further increases in government
intervention, increasing unemployment, broad declines in consumer discretionary
spending, increasing inventory levels, reductions in production because of decreased
demand, layoffs and furloughs, and other restructuring activities. The continuation
of these circumstances could result in an even broader economic downturn which could
have a prolonged negative impact on an entity’s financial results. This Need to
know discusses certain key FRS 102 accounting considerations related to
conditions that may result from the COVID-19 pandemic.
Key changes include clarifications on disclosures for
'Going concern' and 'Liquidity risk management', new subsections on
'Contracts to buy/sell commodities', added guidance for idle assets in
'Restructuring plans', as well as clarifications in 'Share-based
payments', 'Government assistance' and 'Distributable profits'.
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publication.