COVID-19 Effects Are a Required Financial Statement Disclosure
Linda J. Burke, Paraprofessional at Klatzkin, contributed to this post.
All organizations are required to detail the effects of the COVID-19 pandemic on their organization in the financial statement notes. This disclosure requirement is for commercial entities as well as nonprofit entities. When working with your accountant on the financial statements, be sure to consider both the current and anticipated effects of the pandemic on your organization. Specifically, consider the following potential COVID-19-related effects:
- Impact on current financial condition and results of operations
- Impact on future financial condition and results of operations
- Impact on liquidity position, access to capital, ability to service debt
- Material COVID-19 related contingencies
- Changes in valuation estimates such as fair value
- Material impairments (goodwill, intangibles, long-lived assets, investments securities)
- Material increases in allowances for bad debts, other expenses, and changes in accounting estimates
- Changes in internal controls because of remote work arrangements
- Material effects on demand for products or services
- Material adverse effects on supply chain materials flow or distribution of product and services
- Material effects on productivity
- Material effects of mandated closures and canceled events
- Material costs of additional safety procedures
- Impact of travel restrictions and border closures
If you have any questions regarding the information outlined above or need assistance with a tax or audit-related issue, Klatzkin can help. For additional information, click here to contact us. We look forward to speaking with you soon.
©2021 Klatzkin & Company LLP. The above represents our best understanding and interpretation of the material covered as of this post’s date and does not constitute accounting, tax, or financial advice. Please consult your advisor concerning your specific situation.