{"id":14558,"date":"2020-04-30T19:06:55","date_gmt":"2020-05-01T00:06:55","guid":{"rendered":"https:\/\/sfwpartnersllc.com\/?p=14558"},"modified":"2020-04-30T19:06:55","modified_gmt":"2020-05-01T00:06:55","slug":"questions-to-ask-when-making-covid-19-risk-disclosures","status":"publish","type":"post","link":"https:\/\/www.sfw.cpa\/news-and-guides\/questions-to-ask-when-making-covid-19-risk-disclosures\/","title":{"rendered":"Questions to Ask When Making COVID-19 Risk Disclosures"},"content":{"rendered":"

<\/head><\/p>\n

<\/p>\n

Efforts to contain the spread of the novel coronavirus (COVID-19) have led to suspension of many economic activities, putting unprecedented strain on businesses. The Securities and Exchange Commission (SEC) recently issued guidance to help public companies provide investors and other stakeholders with useful, accurate financial statement disclosures in today\u2019s uncertain marketplace.<\/p>\n

New disclosure guidance<\/strong><\/p>\n

On March\u00a025, the SEC issued interpretive guidance, Coronavirus (COVID-19), CF Disclosure Guidance: Topic No.\u00a09<\/em>. It highlights best practices in disclosing the risks and effects of the COVID-19 pandemic.<\/p>\n

The guidance recommends using a principles-based disclosure system rooted on the concept of materiality. This means companies should disclose information that a reasonable person would find important in the total mix of information considered when making a decision to sell or buy a company\u2019s stock.<\/p>\n

10 questions<\/strong><\/p>\n

The SEC guidance offers the following 10 questions for companies to consider when making COVID-19-related disclosures:<\/p>\n

    \n
  1. How has COVID-19 impacted your company\u2019s financial condition and results of operations \u2014 and how might it impact future operations?<\/li>\n
  2. How has COVID-19 impacted your company\u2019s liquidity position and its capital and financial resources? Do you expect to incur any material COVID-19-related contingencies?<\/li>\n
  3. How will COVID-19 affect assets on your company\u2019s balance sheet and its ability to account for those assets in a timely manner?<\/li>\n
  4. Have there been (or do you anticipate) any material impairments (for example, related to goodwill, intangible assets, long-lived assets, right of use assets and investment securities), increases in allowances for credit losses, restructuring charges, other expenses or changes in accounting judgments?<\/li>\n
  5. Have remote working arrangements and other COVID-19-related circumstances adversely affected your company\u2019s ability to maintain operations, including financial reporting systems, internal control over financial reporting, and disclosure controls and procedures? If so, what changes in controls have occurred during the current period?<\/li>\n
  6. Have you experienced challenges or resource constraints in implementing your company\u2019s business continuity plans, or do you foresee requiring material expenditures to do so?<\/li>\n
  7. Do you expect COVID-19 to affect demand for your company\u2019s products or services?<\/li>\n
  8. Will COVID-19 have a material adverse impact on your company\u2019s supply chain or the methods used to distribute products or services?<\/li>\n
  9. Will your company\u2019s operations be materially impacted by any constraints or other impacts on its human capital resources and productivity?<\/li>\n
  10. Are travel restrictions and border closures expected to have a material impact on your company\u2019s ability to operate and achieve its strategic goals?<\/li>\n<\/ol>\n

    This list of open-ended questions isn\u2019t intended to be exhaustive. Each company will need to customize COVID-19-related disclosures using forward-looking information that\u2019s based on assumptions about what may or may not happen in the future. In many situations, the impact will depend on factors beyond management\u2019s control and knowledge.<\/p>\n

    We can help<\/strong><\/p>\n

    The SEC has separately provided 45-day relief for certain reports that need to be filed by public companies. This will give management extra breathing room to assess the evolving situation and estimate the probable effects of the pandemic. Contact us for assistance crafting COVID-19 disclosures in these unprecedented conditions.<\/p>\n

    \u00a9 2020<\/em><\/p>\n

    <\/body>
    \n<\/html><\/p>\n","protected":false},"excerpt":{"rendered":"

    Efforts to contain the spread of the novel coronavirus (COVID-19) have led to suspension of many economic activities, putting unprecedented strain on businesses. The Securities and Exchange Commission (SEC) recently issued guidance to help public companies provide investors and other stakeholders with useful, accurate financial statement disclosures in today\u2019s uncertain marketplace. New disclosure guidance On […]<\/p>\n","protected":false},"author":3,"featured_media":14557,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-14558","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-aa"],"_links":{"self":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/14558","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/comments?post=14558"}],"version-history":[{"count":0,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/14558\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/media?parent=14558"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/categories?post=14558"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/tags?post=14558"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}