Covid-19 implications on financial reporting

Abstract

The outbreak of the COVID-19 pandemic was marked by enormous restrictions, problems that
the world was not prepared for and did not know how to deal with. The problems were not limited
to medicine, they affected all aspects of life, including business and financial reporting. The
emergence of new measures, implementation of aid packages, various reliefs due to the
pandemic that reduced economic activity led to many changes in financial reporting. From the
beginning of its appearance until now, there are constantly new reactions and responses to
COVID-19, from the aspect of financial reporting. One of the most intimidating tasks facing
companies’ financial representatives today is the urgent need to provide extensive disclosures
detailing the pandemic’s impact and how that risk is being managed. The first and most important
topic to address is going concern and liquidity. Reporting entities may have to revise their
disclosures about liquidity risks to let investors know how they are managing their liquidity while
dealing with the COVID-19 crisis. Basically, this is an evaluation of company’s chance of survival.
A survey conducted by Deloitte, one of the “Big Four”, will give an even clearer picture of how
Covid-19 affects the operations and reporting of global companies.