FASB News
Healthcare Accountants: Coronavirus Came at Pivotal Reporting Period
The coronavirus (COVID-19) pandemic coincided with the most significant reporting and tax season of the year for the healthcare sector, according to accounting professionals. “[The pandemic] comes at a pivotal time in financial reporting, with most years end completed, yet a significant subsequent event occurred that would have to be evaluated relative to the 12/31 years ends under audit,” Steven Shill, Partner and National Leader, BDO Center for Healthcare Excellence & Innovation, at BDO USA, LLP, said. “Although the conclusion is that the subsequent event is not a ‘non-recognized event’ for year ends through to January 30, 2020—the date that the national emergency was declared—it is still relevant to going concern and debt modification considerations.” Companies would look to Accounting Standards Codification (ASC) Topic 855, “Subsequent Events,” to determine whether they either have a recognized event or a nonrecognized event. The two exceptions, Shill said, are evaluation of a going concern (i.e., whether the company survives within the next 12 months) and any subsequent debt modifications that must take place as a result of COVID-19 issues.
PCAOB News
Auditors Obligated to Provide High-Quality Audits During Crisis
With the unprecedented challenges presented by COVID-19, the PCAOB has issued a staff guide to remind independent auditors of their obligations to follow applicable rules and standards diligently as they complete their audit work. The staff guide, COVID-19: Reminders for Audits Nearing Completion, says that, as of the issuance date of April 2, 2020,, auditors who are close to completing audits are dealing with time-sensitive and complex issues, and appropriate responses to COVID-19 issues will depend upon each audit’s circumstances. The staff guide thus does not provide detailed guidance on how to apply the PCAOB’s standards. “The COVID-19 crisis is having a significant impact on investors, issuers, and auditors alike,” PCAOB Chairman William Duhnke said in a statement on April 2, 2020. “This spotlight is intended as a reminder that adherence to our standards takes on added importance as investors depend now, more than ever, on the integrity of financial statements.”
IASB News
IASB and EU Groups to hold Joint Investor Webinars in May
The IASB will hold joint webinars with the European Financial Reporting Advisory Group, the European Federation of Financial Analysts Societies, and the Belgian Association of Financial Analysts on May 19 and 26. The discussions will be on the IASB’s proposals to improve how primary financial statements, including the income statement, are communicated. In December 2019, the IASB published Exposure Draft (ED)2019-7, General Presentation and Disclosures, to replace International Accounting Standard (IAS) 1, Presentation of Financial Statements, with a new standard that would include new requirements on presentation and disclosures in financial statements, as well as requirements brought forward from IAS 1. The new requirements would include new subtotals in the income statement, as well as guidance on management performance measures (non-GAAP) and nonrecurring items. The panel will also discuss potential further improvements. Each webinar will focus on a specific part of the ED, and will include a panel discussion and Q&A session.
