Hot Topic | April 2020

 

COVID-19 impacts on the accounting for financial instruments

Updated: The ongoing economic downturn caused by the COVID-19 pandemic may have an impact on the accounting for certain financial instruments. KPMG highlights key reminders for companies to consider in the current economic environment.

Applicability

  • All companies

Relevant dates

  • Effective immediately

Key impacts

  • We believe that the recent economic disruption resulting from the COVID-19 pandemic may impact accounting and financial reporting for various financial instruments.
  • This latest update provides additional guidance for expected credit losses, loan modifications, debt arrangements, derivatives and hedge accounting, investments in debt and equity securities, and equity method investments.

Report contents

  • Background
  • Expected credit losses
  • Loan modifications (lender accounting)
  • Financial guarantees
  • Debt modifications and loan covenants
  • Derivatives: Normal purchases and normal sales scope exception
  • Hedge accounting
  • Equity method investments
  • Fair value measurements
  • Investments in debt and equity securities

 

Spotlight on contributors

Lisa Blackburn

Lisa Blackburn

Executive Director, Dept. of Professional Practice, KPMG US

Danielle Imperiale

Danielle Imperiale

Executive Director, Dept. of Professional Practice, KPMG US

Mark Northan

Mark Northan

Partner, Dept. of Professional Practice, KPMG US

Daniel Vance

Daniel Vance

Senior Manager, Dept. of Professional Practice, KPMG US

 

 

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