Handbook: Accounting for economic disruption
Handbooks | June 2024
Our new in-depth guide explores the accounting for the impact of economic disruption on financial reporting.
Using Q&As and examples, our in-depth guide includes considerations and observations to help guide companies when evaluating the impact of economic disruption on their financial reporting.
Applicability
- All entities
Relevant dates
- Effective immediately
Navigating the financial reporting implications of economic disruption
Economic disruption may impact companies around the globe at different times and in different ways. When faced with economic disruption and the ensuing economic uncertainty it creates, companies need to promptly identify potential financial statement impacts and consider the associated accounting and disclosure consequences.
Regulators focus on quality financial reporting during periods of economic disruption, as well as the sufficiency and timeliness of disclosures related to the impact of the resulting uncertainty on the financial statements. Transparency is at the center of this focus, particularly as it relates to estimation uncertainties and the underlying basis for critical judgments used in financial reporting.
Virtually any financial statement account could suffer the impacts of economic disruption. It’s difficult to identify a line item on the balance sheet or income statement that could go unaffected. Then there are the additional disclosures that may be necessary, such as those related to going concern, impairment, contingencies and risks and uncertainties.
Report contents
- Executive summary
- Revenue
- Financial assets, derivatives and hedging
- Inventory
- Goodwill and indefinite-lived intangibles
- Long-lived assets, leases and equity method investments
- Liabilities
- Compensation and benefits
- Income taxes
- Financial statement presentation, disclosures and MD&A
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Accounting for economic disruption
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