Hot Topic | March 2020

 

Insight

COVID-19 impacts on arrangements with customers

Potential impacts on accounting for arrangements with customers, including revenue, inventory and other related costs.

Brian Allen

Brian Allen

Partner, Dept. of Professional Practice, KPMG US

+1 212-954-3621

Meredith Canady

Meredith Canady

Partner, Dept. of Professional Practice, KPMG US

+1 212-909-5858

The economic and financial markets effects of the COVID-19 outbreak may have a number of impacts on companies’ accounting for arrangements with customers. This article addresses how uncertainties in customer demand and the disruption to supply chains, manufacturing and workforce capabilities may impact companies’ revenue and inventory accounting.

Applicability

  • All companies

Relevant dates

  • Effective immediately

Report contents

  • Variable consideration
  • Customer credit risk
  • Contract modifications
  • Stand-alone selling prices
  • Inventory
  • Contract costs
  • Other customer incentives and estimates
  • Disclosures
  • Subsequent events

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