Hot Topic | April 2020


SEC provides disclosure guidance for companies affected by coronavirus

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


  • SEC registered companies impacted by coronavirus

Relevant dates

  • Effective immediately

Key impacts

  • 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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