We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on the ESCP website. However, if you would like to, you can change your cookie settings at any time.


What is the impact of the COVID-19 crisis (if any) on companies’ financial statements? Should it be recorded on the Financial Statements of 2019 (that are going to be prepared and approved in the first half of 2020) or only in the 2020? What is the impact on the evaluation of a company’s assets, liabilities, inventories, etc.?

Financial statements are regularly and periodically disclosed by companies to provide financial information useful to existing and potential investors, lenders and other creditors in making decisions relating to providing resources to the company itself (for example, investing buying its stocks). Moreover, financial statements should provide a “true and fair” view of the company’s financial position, cash flows and financial performance. Financial statements are prepared following accounting rules and standards.

Assistant Professor Francesco Venuti, and his co-authors Associate Professor Gladie Man Ching Lui and Associate Professor Paul Pronobis, in the paper “Accounting implications of the COVID-19 outbreak”, provides an overview of the major challenges CFOs face in the light of the current COVID-19 crisis when preparing their financial statements. In particular, CFOs need to consider the magnitude of disruption caused by the outbreak to their business operations and adequately disclose the information about those assets and liabilities that are subject to significant estimation uncertainty. Furthermore, the question arises whether the outbreak represents an event before or after the end of the recent reporting period (Financial Year 2019) which needs to be discussed in the (current) financial statements of 2019. Also, CFOs need to revisit the accounting for fair value estimates, expected credit losses (ECLs), impairments, and other assets. Finally, the CFOs should carefully assess whether these events or conditions may compromise the company’s ability to continue as a going concern (i.e. to continue its business activity).

This paper is part of the first series of impact papers produced by the school’s faculty on “Managing a Post-Covid19 Era”.

The ESCP Impact Papers are meant to help business and society following this unprecedented pandemic and are aimed at providing insights into management knowledge that is applicable to not only practising managers, but also other stakeholders, namely the European community, students and society.

If you would like to find out more, please click here to our latest impact paper discussing the topic above in more depth.