To the Point - SEC Chief Accountant emphasizes need for high-quality financial reporting relating to COVID-19

Overview

The SEC’s Chief Accountant issued a statement emphasizing the need for high-quality financial reporting related to the coronavirus (COVID-19) pandemic. For eligible entities that elect to apply the temporary relief from troubled debt restructuring accounting or elect to defer the adoption of the new credit losses standard as provided by the CARES Act, the SEC staff will not object to the conclusion that these actions comply with US GAAP for the periods the relief is provided. Additionally, based on discussions with the SEC staff, we understand the relief in the CARES Act will not be available to entities other than those described in the Act and eligible entities that elect to defer adoption of the credit losses standard will need to restate their year-to-date results when they adopt the standard to reflect its application as of the beginning of the entity’s fiscal year (e.g., 1 January 2020 for a calendar-year entity).