Russia-Ukraine war

This Hot Topic highlights accounting and financial reporting considerations related to the Russia-Ukraine war, including the potential impact on disclosures, impairment, financial instruments, revenue recognition and more.

Applicability

• Entities with operations, customers or suppliers in Russia or Ukraine
• Entities impacted by economic sanctions stemming from the Russia-Ukraine war
• Entities impacted by foreign currency and commodity price fluctuations

Relevant dates

• Effective immediately

Background

Russia’s invasion of Ukraine and other nations’ responses to the ensuing Russia-Ukraine war (e.g. in the form of sanctions on the Russian government and companies) may have a financial reporting impact on companies reporting under US GAAP. While the impacts are unpredictable, they obviously will affect companies with operations in Ukraine or Russia. For example, a company’s Ukrainian facilities may be damaged or destroyed, while facilities in Ukraine or Russia may need to be indefinitely idled or abandoned. Other companies may be affected if they have significant customers or suppliers in those countries, while financial institutions that hold Russian or Ukrainian sovereign debt may see those investments adversely affected. Lastly, a wide cross-section of companies may be affected by disruptions in the pricing and/or supply of energy and other commodities, and by other downstream impacts.

This Hot Topic provides reminders (not meant to be all inclusive) about some of the potential impacts that the war and related economic sanctions may have on companies. These impacts are not limited to the current reporting period.

Report contents

• Subsequent events
• Risks and uncertainties
• Unusual items
• Considerations for SEC issuers
• Long-lived assets, goodwill, and indefinite-lived assets
• Financial instruments
• Revenue recognition
• Other potential issues