Typically, public companies drafting their periodic reports must make a number of judgments, such as those concerning how to best describe the company’s outlook and risks, how to properly value assets, and whether to take an impairment (and, if so, the appropriate size).
COVID-19 has created extraordinary challenges to management making those judgments—judgments that regulators are likely to scrutinize closely once the crisis is over—for the first quarter 2020 Form 10-Q.
In anticipation of this regulatory scrutiny, public companies should take extra care while preparing their Form 10-Qs. Three areas related to financial reporting—internal controls over financial reporting, forward-looking statements and other disclosures about the effects of COVID-19, and accounting judgments—may require particular attention.
