IFRS in Focus — Accounting considerations related to COVID-19

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.

Originally issued on 28 March 2020, this IFRS in Focus is constantly being updated. Key changes include the interim reports, clarification that the disclosure of sensitivities of estimates is based on conditions at the reporting date (with separate disclosure if needed about impact of post balance sheet events), clarification on the accounting for penalties on late delivery and additional explanations on how a lessee accounts for a modification , including a reminder about impairment.