IAASA, Ireland’s accounting enforcer, has today published an Information Note highlighting the accounting treatment applied by companies impacted by COVID-19.
IAASA is calling on companies to redouble their efforts to provide high quality, company specific disclosures of the impact of COVID-19 in their accounts so as to provide useful information to the users of those accounts.
IAASA conducted a desktop examination of the half-yearly financial reports of twenty equity issuers and the annual financial statements of one equity issuer all with 2020 reporting dates to assess the impact of COVID-19 on those companies and to evaluate the disclosures made regarding COVID-19.
IAASA expects that issuers’ 2020 annual and future half-yearly financial reports will provide enhanced disclosures of the impact of the COVID-19 pandemic. In doing so, issuers should ensure that the following disclosures are clearly provided to aid users’ understanding of the financial statements:
- the effects of the pandemic on the financial performance, financial position, cash flows and risks;
- the critical judgements, sources of estimation uncertainty, sensitivities to and changes in the assumptions underpinning assets, liabilities, income, expenses and cash flows;
- the actions taken to mitigate the impact of the pandemic; and
- the future prospects for the issuer and changes, if any, to the issuer’s strategy for dealing with the pandemic.
The Information Note is available here.