Hot Topic | June 2020



New SEC disclosure guidance about effects of COVID-19

SEC provides additional guidance on coronavirus-related disclosures that companies should consider.

KPMG reports on the SEC staff’s additional views regarding disclosure and other obligations that companies should consider if affected by COVID-19.


  • SEC registered companies impacted by coronavirus

Relevant dates

  • Effective immediately

Key impacts

Latest: On June 23, 2020, the staff of the SEC’s Division of Corporation Finance released CF Disclosure Guidance Topic No. 9A to provide companies affected by COVID-19 additional guidance and disclosure considerations regarding:

  • The impacts of business and market interruptions from COVID-19 on operations, liquidity and capital resources; and the importance of robust and transparent disclosures, including whether such disclosures should also be included in MD&A.
  • The short- and long-term impact of government financial assistance (i.e. CARES Act) on their financial results, as well as related disclosures and critical accounting estimates and assumptions.
  • A company’s ability to continue as a going concern, specifically when there is substantial doubt or substantial doubt has been alleviated, including the need for disclosures in the financial statements and MD&A.

This guidance supplements CF Disclosure Guidance No. 9, which is discussed in more detail below. Within the guidance is a list of valuable illustrative questions intended to help companies assess their disclosures obligations.

On March 25, 2020, the Division staff issued CF Disclosure Guidance No. 9. The staff expressed its views regarding disclosure obligations of companies affected by COVID-19.

  • When the effects of COVID-19 are material to a company, disclosure of the risks and COVID-19 related effects may be necessary for both investment and voting decisions. The guidance provides a list of illustrative questions for companies to consider.
  • Companies and other related persons may be in a position to understand how COVID-19 may impact a company before investors, and that information may be material to investors. Companies, its management, directors and officers should not trade on information that has not been disclosed to investors.
  • As part of its earnings release or other financial results released prior to finalizing its required financial reporting, companies may present non-GAAP financial measures to adjust or help explain the impact of COVID-19. The staff reminds companies to explain why management finds the measure useful and how it helps investors assess the impact of COVID-19 on the financial information being presented.
  • Due to the challenges COVID-19 is presenting, the staff understands some GAAP measures may not be available at the time of earnings release. In these circumstances, the staff will not object to reconciling a non-GAAP financial measure to ‘preliminary GAAP results’ that either include provisional amounts based on a reasonable estimate or a range of reasonably estimable GAAP results.
  • If a company presents non-GAAP financial measures that are reconciled to preliminary GAAP results, it should limit the measures to those used to report financial results to the board of directors. The staff mentioned that companies should use non-GAAP financial measures to demonstrate how management and the board of directors analyze the current and future potential impact of COVID-19 on the company.
  • Companies are encouraged to maintain close communications with their board of directors, external auditors, legal counsel and other service providers as the circumstances progress.

Report contents

  • Background
  • Assessing and disclosing the evolving impact of COVID-19
  • Need to refrain from trading prior to dissemination of material non-public information
  • Reporting earnings and financial results
  • Evolving information

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