KPMG Reporting Update Covid-19 outbreak – Potential financial reporting impacts
The Coronavirus outbreak could impact an entity’s future forecasts and as a result, various accounting estimates. This Reporting Update considers the potential financial reporting impacts.
Coronavirus background
What is the issue?
The Coronavirus outbreak started in Wuhan, China and was first reported on 30 December 2019. The responses by various governments and international organisations which highlighted the severity of the outbreak occurred after 31 December 2019. Some of the responses included the following:
- 22 January 2020: China quarantines the city of Wuhan
- 30 January 2020: The World Health Organisation (WHO) declares a public health emergency of international concern over the outbreak
- 1 February 2020: Australia’s Department of Health advises against all travel to mainland China. Entry to Australia from mainland China is denied to all except Australian citizens, permanent residents, their immediate families and air crews. Those permitted entry are required to self-isolate for 14 days.
Various accounting estimates, which depend on future forecasts, could be impacted by the Coronavirus outbreak such as the carrying value of goodwill and the measurement of expected credit losses.
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