COVID-19: Financial impacts and disclosures has been saved
Perspectives
COVID-19: Financial impacts and disclosures
Considerations for banking and capital markets, insurance, and investment management
When there is limited precedent for how a global pandemic will impact financial markets, how can organizations prepare for COVID-19-related impacts across the reporting landscape? Drawing on experience with past major events, including the credit crisis, we provide sector-specific guidance to successfully prepare for related financial results volatility and associated messaging to stakeholders—as well as the impact of regulatory actions and related disclosures.
Explore content
- Guidance on financial impacts and disclosures
- Impacts across reporting landscape
- Financial impacts and areas of focus
- SEC filing deadline relief
- Thinking through disclosures and messaging
Guidance on financial impacts and disclosures
Not unlike other global crises, it is critically important to be prepared for COVID-19-related financial results volatility and associated messaging to stakeholders, as well as the impact of emergency regulatory action and related disclosures.
We have developed guidance on how to address key areas of focus, including disclosures and internal control considerations for banking and capital markets (BCM), insurance, and investment management.
Download the pdf: COVID-19: Banking and capital markets
Download the pdf: COVID-19: Insurance
Download the pdf: COVID-19: Investment management
Impacts will likely be felt across the reporting landscape
Banking and capital markets |
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Financials |  |
Disclosures |  |
MD&A |  |
Controls | |||
| Market volatility and loss emergence will yield new risks and financial statement impacts that BCM institutions should plan for, analyze, and reflect in financial results | Financial statement users will expect BCM institutions to provide insight into COVID-19’s impact on their business, investments, and loan portfolios in alignment with SEC materials for COVID-19-related disclosure | Analysts will look for interest rate and credit risk sensitivity insights, both short- and medium-term outlooks for capital position, and clarity around significant estimates and assumptions | Virtual environments bring working complications to the performance of SOX controls that may require new controls to be implemented or processes re-tooled | |||||||
Insurance |
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Financials | |
Disclosures | |
MD&A | |
Controls | |||
| Market volatility and loss emergence will drive both risk and financial statement impacts that insurers should plan for and analyze | Financial statement users will expect insurers to provide additional insight into COVID-19’s impact on their business and investment portfolio | Analysts will look for interest rate sensitivity insights, both short- and medium-term, outlooks for capital position, and clarity around significant estimates and assumptions | COVID-19 brings complications, both to the performance and review of SOX controls, that may require new controls to be designed or processes re-tooled | |||||||
Investment management |
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Financials | |
Disclosures | |
MD&A | |
Controls | |||
| Market volatility and loss emergence will drive both risk and financial statement impacts that IM organizations should plan for and analyze |
Financial statement users will expect IM organizations to provide additional insight into COVID-19 impacts on their business and investment portfolios |
Analysts will look for interest rate and credit risk sensitivity insights, both short- and medium-term outlooks for capital position, and clarity around significant estimates, scenarios, and assumptions |
Virtual environments pose complications for the performance of SOX controls; new or compensating controls or process adjustments may be needed |
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COVID-19 financial impacts and areas of focus
Banking and capital markets
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Insurance
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Investment management
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SEC filing deadline relief
Thinking through disclosures and messaging
Banking and capital markets
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Insurance
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Investment management
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Internal control considerations
With the potential for additional disclosures, there will be new or adjusted quantitative calculations and data required to support those disclosures. Entities will need to ensure that they have properly designed and implemented controls related to the selection and application of GAAP for the accounting and disclosure issues. As such, companies should be proactive in assessing controls that will need to be designed and implemented over any newly-key EUCs, key reports, or business processes. Further, as risk assessments are being performed and reviewed, the impact of COVID-19 should be considered as a factor when determining ICFR risk in financial statement lines and business processes where the market and macroeconomic impacts are most felt.
Issuers are reminded that any changes in internal controls that have materially affected, or are reasonably likely to materially affect, entities’ ICFR must be disclosed in Item 4 of Form 10-Q (or the equivalent).
Deloitte support
As your organization responds to the impacts stemming from COVID-19, Deloitte stands ready to help you tackle your most complex strategic, financial, and operational issues. A sample of areas in which we can assist include:
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Get in touch
| Wallace Nuttycombe Principal, Deloitte Advisory | Financial Services wnuttycombe@deloitte.com +1 973 602 6769 |
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