Must read for CFOs and Auditors: The ICAI Guidelines on COVID-19 Fallout on Accounting and Audit
The whole world is coming out with their advisories for dealing with the implications of the Covid-19 Fallout. The sole accounting body in India has not left its footprint for the same. Although SEBI has given more time to file earnings reports , corporates are still trying to meet their internal deadline amidst this fight against the Coronavirus. This puts a very high pressure on CFOs and Auditors to close the numbers and sign off while working from home. The ICAI has released its guidelines for CFOs and Auditors on how to handle certain specific accounting issues due to Covid-19. We have summarized possible accounting implications under Ind AS reporting related to Covid -19. 1. Inventory : Reconsider Inventory Valuations to the “Net Realizable Value” considering the following: Reduced movement in inventory Decline in selling price Inventory obsolescence due to lower expected sales Amount of fixed overhead allocated to each unit of production shall not be incre...