Specific Aspects of Recording the Impact of the Pandemic in the Accounting and Financial Reporting of Organizations

The spread of coronavirus infection, the resulting pandemic, and the subsequent economic crisis have had a significant impact on the accounting and financial reporting of Russian and foreign companies. Aim. The presented study aims to analyze the impact of the pandemic on the accounting and financial reporting of organizations.

Tasks. The authors identify and classify areas of the financial and economic performance of organizations affected by the pandemic and examine methods for recording them in accounting and reporting in accordance with the requirements of the modern regulatory system in Russia and worldwide.

Methods. The methodological framework of this study includes general scientific methods of cognition, namely observation, generalization, comparison, analytical assessment of the content of legal documents in the field of accounting and reporting.

Results. Based on the principle of prudence, which should be ensured by the accounting policy of each organization in accordance with Russian Accounting Standard 01/2008, areas of the financial and economic performance of organizations affected by the pandemic are those with a negative impact. These areas are divided into three directions: increased operating costs (for ordinary activities and other expenses), decreased economic benefits gained from expenses incurred in the past (identification of onerous contracts), and uncertain future business environment (adjusting and non-adjusting events). While the overall increase of semi-fixed expenses of organizations during the pandemic may be compensated by a significant reduction in variable costs of the company's ordinary activities due to their reduced scope, cost-effectiveness associated with the execution of contracts concluded before the pandemic may be reduced in some cases. Adjustments in the estimated economic benefits relative to the costs of these contracts must be reflected in financial statements. In order to adequately reflect the future uncertainty of the business environment in the accounting records, it is necessary to use the professional judgment of persons responsible for the formation and presentation of these records to interested users. In the context of the pandemic, this judgment should be applied to the assessment of the going concern assumption, net realizable value, impairment of receivables, fixed assets and intangible assets, obligations under onerous contracts, etc.

Conclusions. The methodology for recording the impact of the pandemic on the financial and economic performance of the organization in accounting has been sufficiently developed and enshrined in the current versions of international financial reporting standards. Depending on the circumstances specific to a particular organization, persons responsible for financial reporting should make professional judgments regarding various significant issues. At the same time, special care should be taken in this regard, because overestimating income and assets (or underestimating expenses and liabilities) can mislead interested users, and overestimating the created reserves (underestimating the value of assets, overestimating expenses and liabilities) can lead to an unfair decrease in the company's investment attractiveness. Information about such judgments should be fully disclosed in accordance with IAS 1 - Presentation of Financial Statements. According to Russian accounting law, federal and industry standards effective in the Russian Federation are based on international financial reporting standards, which means that these issues will need to be addressed when preparing interim and final financial statements of Russian enterprises in 2020.

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