The speed and the size of the economic impacts that COVID-19 had on business’ bottom line has bought into stark reality the importance of robust financial stress testing and forecasting – way beyond what many businesses were undertaking in the past.
During times of economic uncertainty, this is even more important. Specific areas that may be impacted include; carrying value of goodwill, onerous contract provisions, net realisable value of inventory, deferred tax assets, cash flow hedge accounting and the measurement of expected credit losses.
If your business is impacted by COVID-19 it’s important to monitor the situation and maintain close communications with key stakeholders. Changes in circumstances may also require additional or enhanced disclosures in financial reports.