Contributed by Moore Singapore

The emergence of COVID-19 has provided an awakening call for much of the business world. With nearly 3 billion people around the globe under COVID-19 lockdowns, many businesses in the world are experiencing unprecedented business challenges. As governments around the globe enforce economic activity lock-downs to stop the spread of the virus, some countries may potentially face “off-the-cliff” GDP declines which can have detrimental consequences for businesses. Businesses must also deal with enforced working from home practices and unprecedented supply chain disruptions, both of which can be challenging for the unprepared.

In this article, we share some thoughts on the key issues precipitated by COVID-19 and matters that should be on the agenda of key business leaders, both during this critical period, as well as after.

Fiscal preparedness and financial health assessment


The onset of COVID-19 has highlighted the lack of fiscal preparedness by some small businesses, some of which, reportedly, have adequate cash resources to survive only a matter of days.

With businesses no longer being able to carry on as usual, the ability of businesses to sustain fixed costs such as employee salaries, rental and loan interest costs can become a matter of financial survival. Without adequate forethought and planning including scenario analyses and rigorous cash flow planning, the availability of sufficient liquidity during this period can become the determinant of financial survival. COVID-19 has brought to the fore the role of rigorous and regular financial health and liquidity assessments in every business and company.

Business continuity planning (BCP)


COVID-19 has demonstrated the need for businesses to proactively plan for business continuity to ensure enterprise adaptability against all kinds of occurrences including low-probability “black swan” events like COVID-19. As working from home and telecommuting becomes the new normal, enterprises that are not prepared for this new mode of business will face greater adaptation challenges as the crisis unfolds.

Technology is a vital enabler but not a panacea, as a good BCP should also address business issues such as maintaining customer confidence, dealing with employee anxiety and ensuring continued business productivity. Supply chain disruption is another key topic on the BCP agenda in the COVID-19 context, and well-prepared businesses should be able to look to force majeure and other contractual clauses that were crafted to defend against such unpredictable occurrences.  In today’s uncertain business environment, a comprehensive BCP should be on the Board agenda of every business.



The rapid ascent of technology in adapting to the coronavirus threat has also led to an escalation of the importance of cybersecurity. Already, phishing scammers have tried to capitalise on the COVID-19 theme to lure unsuspecting targets for their own ends. With escalation of work-from-home practices, the opportunity for cyber criminals to target remote workers is also on the rise.

Against this backdrop, cybersecurity is another topic that we believe should be on the minds of business leaders, and strong cybersecurity controls will be at the forefront of every organisation’s defence against cyber threats. Cybersecurity concepts such as second factor authentication, virtual private networks, anti-phishing, anti-malware, penetration testing, and real-time threat identification have progressed beyond mere “cyber-speak” that traditionally only dwell in the domain of cyber professionals, to be board room agenda items that business leaders need to be aware.

Financial reporting considerations


Last but not least, COVID-19 has important implications on financial reporting. For December 2019 year end clients, the general consensus has been that COVID-19 is a non-adjusting subsequent event which only necessitates disclosure where the effects are material, but as we move into 2020, companies will have to move beyond subsequent events disclosure and start dealing with the implications. Even for December 2019 year end clients, the assessment of going concern arising from COVID-19 events will be impacted, as this extends beyond the reporting date of 31 December 2019, up to the date on which the financial report is issued. Post-December 2019, fair value measurement and asset impairment analysis will be challenging amidst the current business uncertainties.

The International Accounting Standards Board has also recently issued guidance on the assessment of expected credit loss (ECL) debt provisions against the backdrop of COVID-19, highlighting that ECL assessment is forward-looking but not mechanistic. Therefore, it should consider forecast conditions such as COVID-19 as well as the government support measures being undertaken. However, the extension of payment holidays should not mechanistically result in an assessment that credit risk has increased significantly.

Finally, the accounting for government support measures may require an assessment of whether the relief is classified as income tax, government grant, or in some cases business and rental rebates, which may not always be clear-cut.

COVID-19 is no doubt an unwelcome and unprecedented “black swan” event for many businesses. Yet the challenges and lessons that COVID-19 brings along can be an invaluable opportunity for businesses to “introspect”, re-invent, and emerge stronger from the crisis. Any resulting business downtime can also be constructively deployed to re-focus the business and re-skill employees. In this process, professional support from experienced and trusted consultants can be invaluable. Please feel free to contact us at Moore Stephens for any questions and support.

Our best wishes for everyone to stay safe, well and strong during this uncertain period.

To understand more about how we can support your business and help you to achieve your business objectives, contact us today.