A Real Estate focus on COVID-19 accounting considerations

In this Spotlight we provide a summary of accounting issues that real estate entities might face and where to find further guidance. While this Spotlight focuses on issues that are likely to be the most frequently encountered, many others are certain to arise. As the situation continues to evolve, so too will the consequential accounting issues. For these reasons, the following is not an exhaustive list of all relevant accounting considerations.

Banking - Areas of focus for interim disclosures by banks during COVID-19

Explaining and understanding expected credit loss disclosures under IFRS 9 is challenging. Due to increased uncertainty caused by COVID-19, financial statement users are expressing interest in disclosures that ‘tell the story’, and we expect that to continue. In this publication, we share perspectives on where to focus in developing and refining such disclosures.

IFRS 16 COVID-19 Related Rent Concessions Amendment

As a result of the coronavirus (COVID-19) pandemic, rent concessions have been granted to lessees. Such concessions might take a variety of forms, including payment holidays and deferral of lease payments. On 28 May 2020, the IASB published an amendment to IFRS 16 that provides an optional practical expedient for lessees from assessing whether a rent concession related to COVID-19 is a lease modification.

Banking - Top 10 questions Audit Committees and CFOs should be asking in FY20

Coronavirus (COVID-19) has had a significant impact on credit conditions and levels of uncertainty. As a result, banks’ processes for estimating IFRS 9 expected credit losses (ECLs) have had to adapt. In this publication, we provide the top 10 questions about ECLs that we believe audit committees and CFOs of banks should be asking now.

A Consumer Markets Industry Focus on COVID-19 Accounting Considerations

While this Spotlight focuses on issues that are likely to be the most frequently encountered, many others are certain to arise. As the situation continues to evolve, so too will the consequential accounting issues. For these reasons, the following is not an exhaustive list of all relevant accounting considerations.

A Shipping Focus on COVID-19 Accounting Considerations

In this Spotlight we provide our insights into the top accounting and reporting issues that shipping entities might face. While this Spotlight focuses on issues that are likely to be the most frequently encountered, many others are certain to arise. As the situation continues to evolve, so too will the consequential accounting issues. For these reasons, the following is not an exhaustive list of all relevant accounting considerations.

Banking - Post-model adjustments for expected credit losses during COVID-19

Banks calculate expected credit losses (‘ECLs’) under IFRS 9 using forward-looking judgements, models and data. Overlays, or post-model adjustments, are often used to address shortcomings where models or data have limitations. As a result of severe economic conditions and uncertainty arising due to coronavirus (COVID-19), there is an increased need to apply overlays in calculating ECLs. In this publication, we provide considerations that might be helpful in developing and monitoring such overlays.

An Oil and Gas Industry Focus on COVID-19 accounting considerations

In this Spotlight we provide our insights into the top nine issues that oil- and gas-related entities might face. While this Spotlight focuses on issues that are likely to be the most frequently encountered, many others are certain to arise. As the situation continues to evolve, so too will the consequential accounting issues. For these reasons, the following is not an exhaustive list of all relevant accounting considerations.

A Mining Industry Focus on COVID-19 accounting consideration

In this Spotlight we provide our insights into the top 10 issues that mining-related entities might face. While this Spotlight focuses on issues that are likely to be the most frequently encountered, many others are certain to arise. As the situation continues to evolve, so too will the consequential accounting issues. For these reasons, the following is not an exhaustive list of all relevant accounting considerations.

A Utility Industry Focus on COVID-19 accounting considerations

In this Spotlight we provide our insights into the top issues that utility entities might face. While this Spotlight focuses on issues that are likely to be the most frequently encountered, many others are certain to arise. As the situation continues to evolve, so too will the consequential accounting issues. For these reasons, the following is not an exhaustive list of all relevant accounting considerations.

12 November 2020

FAQ 3.2.17 – In the context of COVID-19, what are relevant considerations when determining if a financial instrument is credit impaired based on qualitative factors?

As a result of COVID-19, there has been widespread granting of payment holidays, as well as subsequent payment holiday extensions, to borrowers by banks and similar lending institutions. As a result, financial instruments will often hit ‘quantitative’ triggers for credit impairment, based on days past due, much later than would ordinarily be the case.

14 August 2020

FAQ 3.2.15 – Factors to consider in relation to ‘days past due’ for IFRS 9 ECL where a loan has been granted a payment holiday

The IFRS 9 ECL model contains rebuttable presumptions where contractual payments on a financial instrument are more than 30 or 90 days past due. Where a loan is granted a payment holiday (for example, in connection with COVID-19), what factors should be considered when assessing ‘days past due’ and determining whether the loan has had a significant increase in credit risk (‘SICR’) or is credit impaired?

14 August 2020

FAQ 3.2.16 – Staging of loans where a significant increase in credit risk has occurred that cannot be identified individually or that is based on shared credit risk characteristics

A bank has advanced 1,000 loans to individual borrowers which, to date, have been classified in stage 1 for expected credit loss (‘ECL’) purposes. Due to COVID-19, the bank estimates, based on reasonable and supportable information (for example, government information on nationwide economic conditions which can be related to these loans), that 20% of the loans have had a significant increase in credit risk (‘SICR’) at 30 June 2020.

12 August 2020

FAQ 2.4.2 – What factors should be considered in determining the normal capacity and abnormal costs for inventory capitalisation as a result of COVID-19?

Due to COVID-19, many territories’ governments have imposed restrictions on entities’ operations for a period of time. As a result of these restrictions, some entities might operate under lower revised capacity and/or incur additional costs to change their business practices. It is unknown when these restrictions will be lifted.