Coronavirus-related impairment of nonfinancial assets
Hot Topic | April 2020
Updated: FAQs on the impairment of goodwill and long-lived assets as a result of COVID-19.
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Now updated with FAQs, the Hot Topic addresses a company’s need to evaluate the recoverability of goodwill, intangible assets, property, plant and equipment, and lease right-of-use (ROU) assets.
Applicability
- All companies
Relevant dates
- Effective immediately
Key impacts
The COVID-19 outbreak is having a significant impact on global markets and its effects may trigger the need for companies to evaluate the recoverability of nonfinancial assets.
General questions that companies may be asking include:
- Has our supply chain been disrupted so that we cannot procure raw materials or components for finished goods?
- Has volatility in commodity prices negatively impacted revenues or production costs?
- Have workforce limitations impeded our ability to manufacture products or service our customers?
- What concessions have we provided to our customers?
- Have we lost business due to event cancellations, store or facility closures, lower consumer sentiment, etc.?
- Are operations being curtailed temporarily, or assets mothballed?
- Have the circumstances significantly changed how we expect to use our long-lived assets?
- Are our customers struggling to pay their obligations or even remain in business?
- Has our stock price significantly decreased?
- Have we revised our earnings guidance downwards?
Report contents
- Background
- Goodwill
- Other assets
- Disclosures
- Subsequent events
Download the document:
Hot Topic: Coronavirus - Increased risk of impairment of goodwill and long-lived assets
Download PDFMeet our team
Nick Burgmeier
Partner, Dept. of Professional Practice, KPMG US
Kevin Manson
Senior Manager, Dept. of Professional Practice, KPMG US
Justin Miller
Managing Director, Dept. of Professional Practice, KPMG US
Julie Santoro
Partner, Dept. of Professional Practice, KPMG
Nick Burgmeier
Partner, Dept. of Professional Practice, KPMG US
Kevin Manson
Senior Manager, Dept. of Professional Practice, KPMG US
Justin Miller
Managing Director, Dept. of Professional Practice, KPMG US
Julie Santoro
Partner, Dept. of Professional Practice, KPMG