Impact of COVID-19 on IFRS Financial Statements

Overview

The coronavirus pandemic has affected most businesses globally. There are currently uncertainties around when we will get back to normality. This has implications on the preparation and analysis of the IFRS financial statements.

The extraordinary situation that we are currently in has an impact on the topline (revenue) and the bottom line (profitability). Most entities are required to carry out a going concern and liquidity assessment, and adjust the measurement of the assets and liabilities. Disclosures are required in the interim and annual financial statements to help users assess the impact of COVID-19 on the financial position, financial performance and the cash flows. There are significant judgements and estimates used in preparation of the financial statements.

This half-day virtual course provides an in-depth analysis of the key principles in the standards that affect the financial statements due to the coronavirus pandemic. We will look at the guidance on preparation of the financial statements and real-life examples on the impact of COVID-19.   

Learning outcomes

To enable participants to obtain an in-depth understanding of the key areas of impact on IFRS financial statements due to the coronavirus pandemic:

• Review the key considerations in the going concern assessment
• Identify the significant uncertainties and disclosures required in the financial statements
• Identify the specific standards that require consideration in preparation and analysis of the IFRS financial statements due to the impact of COVID-19
• Apply the principles in various standards identified above to assess the impact of COVID-19 on the financial statements
• Analyse the impact on the measurement of the assets and liabilities, including impairment and debt restructuring
• Overview of the disclosures required in interim and full year financial statements

Who should attend?

The course is useful for preparers and users of financial statements:

• Staff in finance and treasury departments
• Internal and external auditors
• Analysts who review the financial statements
• Senior management and executives

A basic understanding of financial statements under any GAAP is a pre-requisite.

Course outline

09:00 – 10:30 Session 1

Introduction

• Executive summary of the impact of COVID-19 on the financial statements

Presentation of Financial Statements

• Going concern assessment
• Significant judgements and estimates, and related disclosures (IAS 1)

Financial Instruments (IFRS 9)

• Classification of financial assets
• Restructuring of loans
• Impairment based on expected credit loss model, including IASB COVID-19 guidance

Case study: Analysis of disclosures in real-life financial statements

10:30 – 10:45  Break
10:45 – 12:15  Session 2

Measurement of Assets and Liabilities

• Inventories (IAS 2)
• Impairment of assets, including goodwill (IAS 36)
• Leases, including update on rent concessions (IFRS 16)
• Employee benefits (IAS 19)
• Provisions (IAS 37)
• Accounting for government support (IAS 20)
• Deferred tax assets (IAS 12)
• Interim financial reporting (IAS 34)

Case study: Analysis of the impact of rent concessions due to COVID-19