The Financial Reporting Council (FRC) has urged companies to provide more detailed disclosures on the impact the coronavirus (COVID-19) has had on their firm.
In a new review, the FRC stated that although companies provided sufficient information to enable individuals to understand the impact COVID-19 has had on their performance, position and future prospects, some companies would have benefitted from 'more extensive disclosure'.
The Council has reminded companies that they should apply existing accounting policies for exceptional and other similar items to COVID-19-related income and expenditure consistently, and should not arbitrarily split income and expenses between COVID-19 and non-COVID-19 financial statement captions. Companies should also prepare interim reports that provide sufficient information to explain the impact that COVID-19 has had on their performance, position and future prospects, the FRC stated.
Commenting on the matter, David Rule, Executive Director of Supervision at the FRC, said: 'The impact of the COVID-19 pandemic on businesses is pervasive but also differs across sectors, geographies and individual companies.
'This review highlights how important it is for company reporting to explain not only how COVID-19 has affected company performance but also how it might affect a company's future prospects.'