COVID-19

Perspectives

COVID-19 and financial reporting trends

Accounting for the pandemic in the current quarter

To say that financial reporting for the most recent quarter was challenging is an enormous understatement. What financial reporting issues lie ahead given what we have learned from that quarter? This Financial Reporting Alert takes a strategic look at what are likely to be the most common hot topics related to accounting for the coronavirus disease 2019 (COVID-19) pandemic in the current reporting quarter.

To say that financial reporting for the most recent quarter was challenging is an enormous understatement. Companies faced government-mandated shutdowns, supply chain disruptions, implications of the CARES Act,1 and more. At the same time, they had to figure out how to close their books while their employees worked remotely—oh, and manage operations, too!

What financial reporting issues lie ahead given what we have learned from that quarter? What accounting topics are likely to be trending? Why are those topics trending? What tension points will be associated with those trending topics?

This publication takes a strategic look at what are likely to be the most common hot topics for the current reporting quarter. Links to other Deloitte financial reporting resources that address the effects of the coronavirus disease 2019 (COVID-19) pandemic are provided throughout this publication.

by Eric Knachel, Jana Allen, and Nicole Nelson, Deloitte & Touche LLP

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This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor.

Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

The services described herein are illustrative in nature and are intended to demonstrate our experience and capabilities in these areas; however, due to independence restrictions that may apply to audit clients (including affiliates) of Deloitte & Touche LLP, we may be unable to provide certain services based on individual facts and circumstances.

Footnotes:

The Coronavirus Aid, Relief, and Economic Security Act.
2 See, for example, the Wall Street Journal’s article on financial scenario planning.
3 See, for example, the Wall Street Journal’s articles on a survey of economists and forecasts about the speed and shape of recovery.
4 Only in rare cases is it expected that amounts recorded in accumulated other comprehensive income (AOCI) related to a terminated cash flow hedging relationship should remain in AOCI if it is still probable that a delayed forecasted transaction will occur more than two months after the original forecasted period.

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