Accounting Considerations Related to Covid-19
Make sure you're attending to pervasive and difficult questions that must be addressed.
Plan, Prepare, Prevent.
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, 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.
Entities must carefully consider their unique circumstances and risk exposures when analyzing how recent events may affect their financial statements. Specifically, financial statement disclosures will need to convey the material effects of the COVID‑19 pandemic.
Released yesterday, Deloitte's most recent executive summary discusses certain key accounting considerations related to conditions that may result from the COVID‑19 pandemic.