Among the noteworthy takeaways from Deloitte's "Highlights of the 2020 AICPA Conference on Current SEC and PCAOB Developments" are those concerning COVID-19 disclosures and non-GAAP measures and metrics.
COVID-19 disclosure do's include: (i) Consider long-term forward-looking disclosures in conjunction with short-term forward-looking information. For example, discuss the long-term impact of debt, including expected repayment, in connection with a disclosure about a liquidity-prompted drawdown. (ii) Consider whether COVID-19 information imparted on earnings calls (which in some cases has been substantial) is material and thus should be disclosed in the company's SEC filings.
Non-GAAP adjustments should be continually revisited and evaluated anew as the pandemic continues and evolves. Adjustments for items such as cleaning and sanitation expenses, certain types of compensation, and facility costs may or may not be appropriate in one period vs. another depending on the circumstances. Non-GAAP don'ts include adjusting for hypothetical lost revenue and "cherry picking" adjustments.
See our prior reports: "COVID-19: SEC Extends Filing Relief & Issues Disclosure Guidance," "SEC Issues Supplemental COVID-19 Disclosure Guidance," "Non-GAAP Adjustments: (Non)recurring Charges/Gains," "Non-GAAP COVID Adjustments," "Financial Reporting: Non-GAAP," "COVID-19: Non-GAAP Financial Measures Benchmarking," and "Disclosure Guidance No. 9: Non-GAAP/Prelim-GAAP Reconciliations," and additional information & resources on our Financial Reporting page. This post first appeared in the weekly Society Alert!