Example Covid-19 disclosures for financial statements and audit reports are available below.

Micro Companies (FRS 105)

Are not required to make specific Covid-19 disclosures but may voluntarily do so.

Small companies (FRS 102 1A)

Are only required to make disclosures of post balance sheet events (in both the directors' report and in a note to the financial statements), judgements made in applying the accounting policies and “exceptional items”. Small companies are also required to make any additional disclosures as required to show a true and fair view.

Medium and large companies (FRS 102)

Everything required by a small company plus the directors’ report will need to include details on business review and future developments and principal risks. The financial statements will need disclosure of uncertainties regarding the ability of the company to continue as a going concern and key sources of estimation uncertainty.  

Example text to disclose the impact of Covid-19

Notes to the financial statements

Future business success

The directors have very carefully reviewed the trade and the resources available to the company.  They have looked at the support being made available from their bankers and suppliers; the support they are receiving from Government, and the resources available both within the business and from external investors should it be required. In their opinion, the company will successfully get through the current difficult period and emerge stronger and more agile when the economy returns to normal.

The risks for the company are that their bankers will curtail their current lending facilities. The banks have publicly said that they will not do this.  There is also a risk of a major supplier curtailing trade credit or being unable to continue to supply product, neither of these possibilities are considered likely.

There has been a substantial curtailment of the business in the current environment, however, strategic plans have been drawn up to mitigate against any foreseeable risks. The directors are therefore confident that the business will continue and that the financial statements should be drawn upon a going concern basis.

Future business success

The business is largely unaffected by Covid-19 and other than a modest increase in business costs arising from the implementation of additional hygiene and staff protection measures, the business is trading well. The financial statements are therefore prepared on a going concern basis.

Events after the end of the reporting period

In common with most businesses in Ireland, the company is continuing to suffer from a reduction in activity during the Covid-19 pandemic movement restrictions. However, the directors believe that the position is temporary and that the business will return to near normal activity levels within a twelve-month period of the restrictions being lifted. No other significant post balance sheet events took place after the financial year ended 31 December 2020.

Staff Costs

The average number of employees of the company in the financial year was:

The Government wage subsidy received in the year amounted to €XXXX (2019 €XXXX). A constituting element of the wage subsidy is a temporary reduction in employer social insurance from 8.8% or 11.05% down to 0.5% and the company also benefited from this cost-saving. Key management remuneration during the period was €XXXXX.

The aggregate payroll costs incurred during the financial year were:

Accounting policies examples

Government grants

Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received.

Government grants are recognised using the accrual model. Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred, or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable.

Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income and not deducted from the carrying amount of the asset.

(there is no specific need to mention in the policy that the grants related to Covid-19 supports.)

Directors report disclosure examples

Financial Performance and Business Review

The directors have completed a detailed review of the Company's business strategy. The directors anticipate that the present level of activity will be maintained for the foreseeable future and hope to see a further increase in volume of sales before the next year end.

From the early part of the year 2020, the Covid-19 health crisis has spread across the globe and in addition to the enormous impact on human health, it has also caused severe economic disruption. Some businesses have had significantly reduced output and we have had disruption to part of our operations. From early to mid-March 2020 we saw an initial impact on our business activity levels as the spread of the Coronavirus in Europe worsened. Following the additional measures announced by the Taoiseach on Friday, March 27th, to combat the Covid-19 pandemic, we had to limit our operation to essential services in level 5 lockdown periods.

The company availed of the Covid-19 Wage Subsidy Schemes operated by the Revenue following the Irish Government's announcement on 24th March 2020 of new measures to provide financial support to employees affected by the Covid-19 crisis. We are monitoring this position on a continuing basis and will look at other possible options to help reduce costs further if necessary. The financial impact of Covid-19 has been felt prior to our company's financial year end and is reflected in the effected department turnover figures.

It is currently not possible to reliably estimate the duration and economic severity of the Covid-19 pandemic crisis coupled with the uncertainty of the duration of the measures imposed by the Irish Government to try to deal with the health crisis. The directors expect an increase in trading when the current restrictions are lifted. At the time of approving these financial statements it is difficult for the directors to accurately determine how the company's financial position and results will be impacted by the Coronavirus pandemic and as a result a reliable estimate of its financial effect cannot be made at this juncture.

Events after the end of the reporting period

In common with most businesses in Ireland, the company continues to suffer from a reduction in activity during the Covid-19 pandemic movement restrictions. However, the directors believe that the position is temporary and that the business will return to near normal activity levels within a twelve month period of the restrictions being lifted. There have been no other significant events affecting the company since year-end.

Audit Report

Extract when there are material uncertainties relating to going concern.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) and applicable law. Our responsibilities under those standards are described below in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with ethical requirements that are relevant to our audit of financial statements in Ireland, including the Ethical Standard for Auditors (Ireland) issued by the Irish Auditing and Accounting Supervisory Authority (IAASA), and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

We draw attention to Note X of the financial statements, which describes the effects of Covid-19 on the companies trading position. Our opinion is not modified in respect of this matter.

Conclusions Relating to Going Concern

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, other than as described above, we have not identified any additional material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period of at least twelve months from the date when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information