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More Audit & Accounting Alert - Special Edition -
Covid-19 Crisis information and resource links

IASB
International Accounting Standards Board (www.ifrs.org)

1. Discussion Paper - Business Combinations—Disclosures, Goodwill and Impairment published March 19, 2020. The goal is to improve the disclosure about acquisitions and the accounting for goodwill. The Board’s preliminary view is to help investors better understand an acquisition and its subsequent performance by requiring disclosure of management’s objectives for the acquisition in the year of acquisition, and how the acquisition has performed against those objectives in subsequent periods. To improve goodwill accounting, the Board would simplify impairment testing by providing relief from the quantitative annual impairment test and simplify how value in use is estimated. The comment period ends on September 15, 2020.

1. Is Cash Still King? Maximising the Benefits of Accrual Information in the Public Sector, report issued February 26, 2020, jointly with ACCA “not only confirms that a complete public sector transition to accrual accounting will serve the public interest, but also contains 30 specific recommendations to improve accrual implementation.”

1. Is Cash Still King? Maximising the Benefits of Accrual Information in the Public Sector, report published February 26, 2020, jointly with IFAC “not only confirms that a complete public sector transition to accrual accounting will serve the public interest, but also contains 30 specific recommendations to improve accrual implementation.”
2. Global Economic Themes, report published February 19, 2020, in conjunction with the Industry Management Association, “examines three of the longer-term structural issues that are affecting the global economy as well as the global economic impact of the US-China trade tensions. The three issues are: the Euro – fiscal integration needed; China - becoming rich before it becomes old?; the USA – public debt challenges.

1. An overview of integrated reporting for Chartered Secretaries and Chartered Governance Professionals, guidance published March 12, 2020, “shares insights into the fundamental concepts of the International <IR> Framework, the structures that need to be in place to adopt it and the specific role Chartered Secretary and Chartered Governance Professionals can play in its implementation.”

1. How Can Trade Rules Support Environmental Action?, report published March 26, 2020. “As governments and businesses grapple with the effects of COVID-19, other global challenges remain. Once the immediate crisis abates, countries must intensify environmental action to tackle climate change, pollution, and biodiversity loss, even while restarting their economies. Trade policy has a vital role to play. This briefing paper by the Global Future Council on International Trade and Investment highlights the links between trade and the environment, summarizes efforts to date and outlines five ways in which trade rules could support environmental action.”
2. Toward Common Metrics and Consistent Reporting of Sustainable Value Creation, White Paper published January 22, 2019, “proposes a common, core set of metrics and recommended disclosures that International Business Council members could use to align their mainstream reporting and, in so doing, reduce fragmentation and encourage faster progress towards a systemic solution, perhaps to include a generally accepted international accounting standard.”

1. Auditor Reporting Bulletins, issued March 30, 2020, provide guidance for auditor reports on revised accounts, Companies Act reports, and include illustrative statutory auditors reports on United Kingdom private sector financial statements.

1. Auditing Standards Board – Statement on Auditing Standards 139 - Amendments to AU-C Sections 800, 805, and 810 to Incorporate Auditor Reporting Changes From SAS No. 134, issued March 20, 2020, “aligns these three AU-C sections (the AUC 800 series) with the relevant auditor reporting standards in SAS No. 134, thereby updating the form and content of auditors’ reports addressed in the AU-C 800 series to be more consistent with the standards of the International Auditing and Assurance Standards Board and recent updates to PCAOB standards.” Effective for periods ending on or after December 15, 2020.

1. Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting, ASU No. 2020-04, issued March 9, 2020, to “provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.” Effective as of March 12, 2020 through December 31, 2022.
2. Codification Improvements to Financial Instruments - An Amendment of the FASB Accounting Standards Codification, ASU No. 2020-03, issued March 9, 2020, “makes narrow-scope improvements to various aspects of the financial instruments guidance, including the current expected credit losses (CECL) standard issued in 2016. Effective at various dates.

1. Exposure Draft - Communication Methods in General Purpose External Financial Reports That Contain Basic Financial Statements: Notes to Financial Statements, issued February 21, 2020. “The proposals set forth in the Exposure Draft would replace the existing criteria for disclosing information in notes to financial statements. The proposals elaborate on the types of information that should be disclosed in notes and the types of information that are not appropriate for note disclosures.” The comment period ends April 17, 2020.
2. Exposure Draft - Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans, issued March 9, 2020, “is designed to mitigate financial reporting costs associated with certain defined contribution pension plans, defined contribution other postemployment benefit (OPEB) plans, and other employee benefit plans.” The comment period ends April 10, 2020.

1. Amendments to the “accelerated filer” and “large accelerated filer” definitions in Exchange Act Rule 12b-2., issued March 12, 2020. “The amendments would allow smaller issuers that have been public for more than five years, but have not yet reached $100 million in revenues, to continue to benefit from the JOBS Act exemption as they build their businesses, while maintaining important investor protections… As a result of these amendments, and unlike larger issuers, these smaller companies will no longer be required to obtain a separate attestation of their ICFR from an outside auditor.”