The global Covid-19 outbreak is a major disruption to many business operations and as a result special considerations have been made to financial reporting requirements for year-end 2019.  For example, Singapore Exchange Regulation (SGX RegCo) will allow listed companies with a 31 December financial year-end
up to 30 June 2020 (instead of 30 April 2020) to hold annual general meetings to receive and consider their 31 December 2019 financial statements.

Consequently, the question of whether the Covid-19 pandemic is an adjusting or non-adjusting event for entities with a 31 December 2019 financial
reporting date, as well as other associated accounting implications arising from the outbreak, must be addressed.

Singapore Accounting Services

Based on the assessment of the Institute of Singapore Chartered Accountants (ISCA), the Covid-19 pandemic is a non-adjusting event for entities with a 31 December 2019 financial reporting date. The rationale given is:

Although the first cases of COVID-19 surfaced in December 2019, there was no evidence of an outbreak and no adverse changes to the economic and market conditions (as a result of COVID-19) as at 31 December 2019. The outbreak occurred after December 2019 and subsequently resulted in adverse changes to the economic and market conditions. Deterioration of economic and market conditions in 2020 may be traced to the fallout from the surge in COVID-19 cases after December 2019, such as regulatory actions like travel restrictions and quarantine measures by several countries. These subsequent events are not indicative of conditions that existed as at 31 December 2019.

ISCA states that it is important for entities to distinguish what is a direct consequence of the Covid-19 pandemic from what might have resulted from other conditions already present before the end of the reporting period. Therefore, entities should note that adjustments make to any amount reflected in their financial statements at year-end 2019 do not derive from the subsequent impact and disruptions of the current pandemic in 2020. However, if the impact of a non-adjusting event, such as Covid-19, is material to the financial statements, then disclosures should be the means by which financial statements reflect such an effect.  Entities are also reminded to continually assess the impact of the outbreak up to the date that the financial statements are authorised for issue.

In light of the current situation and its many implications, engaging the Singapore accounting services of a Singapore accounting company is a sensible choice, as expert accountants from the company will assist you to achieve fair presentation in your company’s financial statements, through careful consideration of all specific facts and circumstances during this highly irregular period.

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