Accounting implications of the effects of COVID-19

The coronavirus (COVID-19) outbreak has developed rapidly in 2020, with devastating consequences for communities across the globe. Measures taken to contain COVID-19 have affected economic activity, which in turn has implications for financial reporting. While we realise financial reporting is of course lower down the priority list during this period of unprecedented change, we've looked at the impact of COVID-19 on the financial statements of entities whose business is affected.

This document contains new “no action” relief from ASIC for the AGM season of 31 December 2019 year end entities, as well as guidance for those whose financial statements are nearing completion. The majority of this document focuses on the adjusting events to financial reports for years ended after 31 December 2019. There are broad implications including: the ability to forecast cash flows and the related going concern assessment; debt covenants; hedging and financing; impairment of assets; onerous contracts; and recognition of revenues.

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