COVID-19: Meeting SEC Deadlines and Disclosure Rules
Editor's note: This post was originally published in March 2020 and was updated July 16, 2020, to reflect the SEC's decision to not extend filing relief beyond Q1 filings. For more on what to look out for as you prepare your Q2 2020 filings, read this.
The transition to remote work as a result of the new coronavirus may be upending your attempts to file timely reports to the SEC. Whether you rely on your team, your auditors, or even a third party for your SEC reporting process, it takes a village to get reports out the door, even during the best of times. As you may have noticed, these aren't the best of times.
The SEC gave public companies some flexibility to file late for Q1, but that relief hasn't been extended for reporting beyond that. Accounting and finance teams are working furiously to update estimates, forecasts, and judgmental accounting determinations, in most cases while working from home.
How COVID-19 might affect your disclosures
Start with your auditors' guidance and the latest guidance on the SEC's site (go to sec.gov/Coronavirus)—but COVID-19 and the uncertainty surrounding the pandemic will influence your earnings guidance and the way you talk about the impacts of the current environment in your MD&A (management discussion and analysis). This uncertainty could be related to:
- Your customers
- Your supply chain
- Work stoppages
In addition, be sure to take a close look at the way current conditions might impact the potential impairment of goodwill, long-lived assets, or intangible assets and the potential impact to your valuation and impairment of receivables, loans, and investments.
Your peers are no doubt encountering many of the same challenges. Sentieo, a Workiva partner, is an AI-powered research platform you can use to help you quickly surface how other companies are addressing these same issues in disclosures. Keep Sentieo in your back pocket as an option if you suddenly need to backfill someone who normally might have done this research or if you find you'd rather have your people spending time updating forecasts versus searching through peers' filings.
Don't forget these last two points
Finally, be sure to keep up to speed on this rapidly unfolding situation, as new developments could have a significant impact on your disclosures, even after the balance sheet date.
- Pay attention to subsequent events and any other information that becomes available after the reporting date but before you issue your financial statements. Such events may affect your disclosure.
- Be as transparent as possible—including about what you don't know.
These are unprecedented times, and uncertainty abounds. While that uncertainty may impact your disclosures, it doesn't have to destroy confidence in your reporting.
About the Author
Steve is Senior Director of Product Marketing and Accounting Industry Principal at Workiva. Previously, Steve served as an accounting leader in multiple roles including Vice President and Controller for Backcountry.com, a private equity owned, online retailer of outdoor products, and as the Director of SEC Reporting for Overstock.com (NASDAQ: OSTK), a $2 billion revenue, online retailer of home goods and blockchain technology company. His experience includes multiple acquisitions, debt offerings, an IPO, and the world’s first digital debt and equity offering (by Overstock). Steve is the Executive Advisor of the SEC Professionals Group, and a former member of the US XBRL Data Quality Committee. He began his career as an auditor in public accounting, received his Accounting degree from the University of Arizona, graduating summa cum laude, and received a Master of Accountancy and Information Systems degree from Arizona State University.