INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

IFRS News - June 2020

Mark Hucklesby Mark Hucklesby

Welcome to the IFRS News COVID-19 Special Edition. The novel coronavirus (COVID-19) pandemic continues to spread around the globe rapidly. The virus has taken its toll on not just human life, but businesses and financial markets too, the extent of which is currently indeterminate. Entities need to carefully consider the accounting implications of this situation.

This IFRS News summary draws attention to the IFRS Resources we have produced over recent weeks that are currently available to help you and your financial reporting requirements.

In this edition

COVID-19 Financial Reporting and Disclosures

This article identifies key financial reporting areas that entities need to consider when determining the impact on their business, and on the results, financial position and disclosures in their financial statements. This does not cover every possible area that may be impacted and there may be other considerations that entities should make.

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Reporting considerations of COVID-19 for CFOs

This is a helpful set of key questions for CFOs to help them consider the effects of the pandemic on their financial statements. It also provides some illustrative wording on what to include in a subsequent events note for balance dates on or after 31 March 2020.

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IFRS Alert 2020-06

This Alert looks at the IASB’s relief for lessees when accounting for relief when accounting for rent concessions during the COVID-19 pandemic. The amendment adds a practical expedient to the Standard which provides relief for lessees in assessing whether specific COVID-19 rent concessions are considered to be lease modifications. Instead, if this practical expedient is applied, these rent concessions are treated as if they are not lease modifications. There are no changes for lessors.

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2020 Deferred tax provision

This article entitled 'Understanding the impact of COVID-19 on your deferred tax provision' sets out four key areas of your tax provision that could be affected by the impacts of COVID-19. More specifically we focus on how government assistance in the form of tax incentives and tax relief might change previous assessments that were made applying IAS 12 ‘Income Taxes’ (IAS 12).

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COVID-19 Accounting considerations – Impairment of intangible assets and goodwill

Identifies nine issues management needs to consider when assessing impairment of goodwill and intangible assets that might have resulted from the COVID-19 pandemic. It also provides a table of IFRS standards other than IAS 36 ‘Impairment of Assets’ that should be considered when assessing impairment within a set of financial statements that state that have been prepared in accordance with IFRS.

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COVID-19: Accounting for lease modifications

IFRS 16 has become an area of focus for entities and the International Accounting Standards Board (IASB) during the pandemic. IFRS 16 contains specific requirements on accounting for lease modifications which can be burdensome, especially for large portfolios of leases with different features and different types of concessions. Entities already have significant pressures upon them as a result of this pandemic and what is set out in IFRS 16 just adds to the burden. The IASB has therefore added a practical expedient to IFRS16 to provide relief for lessees from lease modification accounting for rent concessions related to COVID-19. This article explains the current accounting requirements, the practical expedient and how to apply it.

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How Grant Thornton can help

Now more than ever the need for businesses, their auditors and any other accounting advisors to work closely together is essential. If you would like to discuss any of the points raised in these articles, please speak to your usual Grant Thornton contact or your local member firm.