Firms facing serious cash-flow and other problems in the Covid-19 crisis should clearly disclose this in their financial statements to avoid challenges by auditors or stakeholders, PwC has said.
"It is important not just to get the numbers right and to ensure full compliance with accounting rules and best practice," said Enda McDonagh, assurance leader at PwC Ireland.
"Firms also must consider their disclosures from the perspective of investors and stakeholders. From cash-flow projections, recoverability of assets and implications for contracts, the picture may be vastly different since the onset of Covid-19."
Companies facing sudden losses may need to revise their value of assets and liabilities, provide more challenging 'going concern' assessments and make extra disclosures.
"The impact of the pandemic may result in application of new policies or change significant judgments and critical estimates used in those financial statements. All require disclosure," he said.