BDO Releases IFRB 2020/02 - Potential Effects of the Coronavirus on 31 December 2019 Year-end Financial Reporting
19 March 2020
An amendment has been made to IFRB 2020/03 and IFRS Practice Alert 2020/03 on the potential effects of the coronavirus – 2020 and onward. This amendment clarifies which information an entity considers at each period end when determining how the financial statements are affected by COVID-19.
The section in italics has been added to the Background section:
For reporting periods ending on or after 31 January 2020, the effects of the coronavirus would need to be incorporated into the preparation of financial statements.
However, when assessing the position for reporting periods ended 31 December 2019, 31 January 2020 and 29 February 2020, it is important that hindsight is not used. Only information that was known, and expectations about the future, as at the reporting date should be used. This would include management’s estimates of the changing future economic environment and the effects of government announcements and actions up to the reporting date.
For 31 January and 29 February 2020 reporting dates, there will typically be relatively little effect on amounts reported in financial statements. Significant and comprehensive post balance sheet event disclosures need to be made, taking into account significant changes in circumstances during that period, the associated uncertainties and potentially wide range of estimates about the future.
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