Financial instruments accounting impacts of COVID-19

The ongoing economic downturn caused by COVID-19 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 the recent economic disruption resulting from COVID-19 may impact accounting and financial reporting for various financial instruments.
• This latest update provides guidance on hedge accounting when a modified loan or debt instrument, or the interest payments thereon, is the hedged item in a hedging relationship.

Report contents

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