Accounting implications of government assistance, tax and other fiscal stimulus
In response to the COVID-19 pandemic, governments around the world are considering, or have implemented, legislation to cushion the economic impact and help households and entities that are experiencing financial difficulty arising from measures taken to stymie the pandemic.
Nigeria is not an exception as the Federal Government has announced a number of measures to address the impact of COVID-19. Notable amongst these measures are the specific pronouncements by the Central Bank of Nigeria (CBN) that include an extension of the moratorium for government-backed facilities, interest rate reduction, forbearance measures and additional credit support for some industries like Health Care.
There have also been fiscal measures taken by the Federal Government to address the effect of COVID-19 from a national perspective which will see a rise in national debt including local and foreign debt, a significant cut in spending at the federal and state levels arising from the reflection of new realities to the federal budget and possible slowing of the economy in the foreseeable future.
This article discusses the accounting implication of government assistance and its implications in accounting terms for businesses.