COVID-19 has already had a significant impact on global financial markets, and there may be accounting implications for many entities.
Keywords: Mazars, Thailand, Accounting Implications, Audit, Financial Statement, TFRS, NPAEs, TAS
Updated: 2 April 2020
Below are some key issues that entities preparing financial statements applying full TFRS or TFRS for NPAEs for periods ending on or after 31 December 2019 should consider. These do not address management or risk reporting, which also need to be considered.
Some of the key factors that will be affected include:
- Interruptions of production
- Supply chain disruptions
- Unavailability of personnel
- Reductions in sales, earnings, or productivity
- Closures of facilities and stores
- Delays in planned business expansions
- Inability to raise financing
- Reduced tourist numbers, disruptions in nonessential travel and sports, cultural, and other leisure activities
In addition, it may be appropriate for entities to consider the possible impact of the outbreak on accounting conclusions and disclosures related to the following areas:
- Allowances for doubtful accounts
- Valuation of inventories
- Restructuring plans and the breach of loan covenants (including impact on the classification of liabilities as current vs non-current)
- Going concern issues
- Events after the end of a reporting period
- Employment termination benefits
Please note that, as a non-adjusting event, the impact of the COVID-19 outbreak should not be factored into the financial statement balances and accounts as of 31 December 2019, but will impact disclosures, including those related to subsequent events, going concern issues (if the entity is no longer viewed as a going concern) and sources of estimation uncertainty.