Reporting implications of COVID-19 – Coronavirus Job Retention Scheme
On 11 March 2020 the World Health Organisation declared the spread of coronavirus (“Covid-19”) a global pandemic and the UK government has taken unprecedented steps to protect the economy, businesses and jobs during these very difficult times.
The resulting economic uncertainty and geopolitical impact will present the biggest test to a company’s business model, its longer-term viability and the ability to remain a going concern. This level of uncertainty is expected to continue for a considerable amount of time.
One major aspect of UK government support is the Coronavirus Job Retention Scheme (“the scheme”) where eligible employers can claim to cover the wages of employees who are on temporary leave (“furlough”) due to the impact of coronavirus (“Covid-19”).
Businesses are electing to either not use the scheme, employ the scheme in full or apply the scheme in part.
This article focuses on the accounting and reporting implications for UK companies and limited liability partnerships (“LLPs”) taking advantage of the scheme and to help preparers draft appropriate accounting policies under UK GAAP and EU adopted IFRS (“IFRS”).