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The coronavirus outbreak is affecting businesses around the world and forcing entities to carefully examine how the situation might affect their financial reporting. This IRFS Alert looks at the impact of the coronavirus for the year ended on December 31, 2019.
Is the coronavirus crisis considered a post-reporting period event (also known as an adjusting event) for the year ended on December 31, 2019?
- Entities should review IAS 10 – Events after the Reporting Period to determine whether or not the coronavirus crisis is an adjusting event.
- We believe COVID-19 surfaced and spread in 2020 and that there is insufficient evidence that it existed at the end of the reporting period on December 31, 2019. This therefore makes the outbreak a non-adjusting event.
- Entities should ensure that the valuation of their assets and liabilities as at December 31, 2019 is not affected by the coronavirus crisis, which occurred subsequently.
Disclosure
Entities must disclose if a non-adjusting event has had a significant impact on their financial statements. Any such disclosure must include the nature of the event and either an estimate of its financial impact or an indication that the impact cannot be estimated.
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