UK Financial Regulator Urges Companies to Report Coronavirus Risks -- Update
February 18 2020 - 10:28AM
Dow Jones News
By Sabela Ojea
--The Financial Reporting Council urges companies and auditors
to provide information on coronavirus risks when reporting year-end
results
--Assets and liabilities could also be affected by the virus
--Apple Inc. on Monday warned on its revenue projections for the
current quarter over coronavirus concerns
The Financial Reporting Council said Tuesday that companies and
auditors should provide up-to-date information on the risks arising
from novel coronavirus when reporting their year-end results.
The British regulator said that, as companies have to make
public principal risks to their business by law, those who either
operate in or have close trading associations with China should
report the possible impact of Covid-19 on their business.
"Companies will need to monitor developments and ensure they are
providing up-to-date and meaningful disclosures to their
shareholders when preparing their year-end reports," a spokesperson
said.
The FRC issued the advice to companies and auditors that have
"significant" trading links or global supply chains dependent on
Chinese-manufactured goods will need to consider their disclosures
if their businesses face possible disruption.
"Depending on the extent to which the virus spreads outside of
China, other companies could also become affected," the FRC
said.
Year-end balances of those companies whose financial years end
after Dec. 31 could be affected by the coronavirus, the FRC
said.
The financial regulator also warned on the carrying value of
assets and liabilities, which could also be affected with a need to
perform additional impairment tests and to assess whether leases
have become onerous.
"Where mitigating actions can be taken, these should also be
reported alongside the description of the risk itself," the
regulator added.
Apple Inc. became on Monday the first major US company to
announce that it didn't expect to meet its revenue forecasts for
the current quarter due to the coronavirus outbreak, which it said
had limited iPhone production for worldwide sales and curtailed
demand for its products in China.
Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix
(END) Dow Jones Newswires
February 18, 2020 10:13 ET (15:13 GMT)
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