Accounting Fundamentals In Society ACCY111
Week 10 – Lecture Notes
Accounting and COVID-19
COVID-19
“The coronavirus (COVID-19) outbreak has developed rapidly in 2020, with devastating
consequences for communities across the globe. Measures taken to contain COVID-19 have
affected economic activity, which in turn has implications for financial reporting” (PWC,
2020).
Impacts of COVID-19 on annual report disclosures
COVID-19
Significantly impacted financial performance, financial position and cash flows of many
organisations (KPMG, 2021).
Accounting implications include: challenges to forecast cash flows; debt covenants; and
recognition of revenues, etc..
COVID-19
The effects of the pandemic on financial results in the Directors’ Report and in the financial
statements needs to be communicated (KPMG, 2021).
E.g. in Australia Compliance with both the Australian Accounting Standards and Australian
Securities and Investments Commission (ASIC) (KPMG, 2021).
COVID-19
Any quantitative disclosures in the income statement or in the notes to the financial
statements should also be accompanied by narrative disclosures of the impact, explaining the
nature of the expenses, circumstances and how they are COVID-19 related (KPMG, 2021).
Qantas Annual Report 2020
138 pages in length
136 referenced to COVID-19 in the report
“The Qantas Group has seen many challenges in its 100 years, but none with the huge impact
of the COVID-19 crisis” (Qantas, 2020, pp. 4-5).
“it was critical that we moved quickly to protect our balance sheet” (Qantas, 2020, p4).
“After years of record profits, our balance sheet is strong. That enabled us to raise over $2
billion in debt in addition to a $1.4 billion equity raising, giving us the extra liquidity to make
it through to the other side of the crisis” (Qantas, 2020, p.6).
