The COVID-19 pandemic has significantly changed many aspects of our lives. Most of us have had to change the way we work. Many of us are also facing difficult decisions and uncertainty in our workplaces, communities, and our homes. At the Cadence Group, our first thought is the well-being of you, your family, and your communities. We sincerely hope that you are staying safe and healthy during these challenging and unpredictable times.
Key Accounting Topics
We continue to see changing economic conditions arising from the COVID-19 pandemic. You are probably considering what impact the current economic conditions have upon your Company’s financial reporting. At the Cadence Group, we have also been considering this, and wanted to provide you with a few key accounting topics that we think may be applicable to your Company. These may include, but are not limited to:
- Goodwill, intangible assets, and fixed assets measurement (fair value measurements and impairment)
- Leases, including lease modifications, ROU asset impairments, activation of contingency provisions, etc.
- Stock-based compensation and the impact of modification of awards
- Investments, derivatives and hedging instruments
- Inventory valuation (i.e. net realizable value)
- Debt agreement changes (new debt or modification/extinguishment of existing debt)
- Disclosures and subsequent events
Risks, Processes, and Controls
In addition, with the temporary changes to the workplace resulting from current social distancing guidelines, the risks, processes and controls at your Company may be impacted. These may include, but not limited to:
- New risks arising from processes being performed remotely
- Changes made to business processes and control activities to address new or modified risks
- Increased risks within processes that contain significant accounting judgment
- Increased risks within the financial statement disclosure process
- Increased risk in management’s override control activities or fraud
Should you have any questions or concerns addressing the current financial reporting and control issues at your Company, please does not hesitate to reach out to us at Cadence. We have many resources with the knowledge and expertise to help you through these challenging times.
Again, we hope you all stay safe and continue to lead through this unprecedented economic environment.