IFRS in Focus April 2020 (Accounting considerations related to the Coronavirus 2019 Disease)
Updated on 29 October 2020
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 IFRS in Focus discusses certain key IFRS 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 'Dividends and capital management'
and 'Contracts to buy/sell commodities', added guidance for idle assets in 'Acquisitions
and disposals', as well as clarifications in 'Share-based payments', 'Government
assistance' and 'Breach of covenants'.