The coronavirus (COVID-19) outbreak has impacted publicly traded companies that provide information to trading markets, shareholders and to the Securities and Exchange Commission (SEC). Companies need to be mindful with respect to disclosures in annual and quarterly reports, earnings releases, current reports, and public and private securities offering documents.

On March 25, 2020, the SEC’s Division of Corporation Finance issued Coronavirus (COVID-19) Disclosure Guidance, setting forth the SEC’s views regarding disclosure considerations and other securities law matters related to COVID-19 pandemic. The SEC notes that the effects of COVID-19 “are difficult to assess or predict with precision” and “depend on many factors beyond a company’s control and knowledge.” The guidance provides a comprehensive ( non-exhaustive) list of issues for companies to consider. As always, aassessing the effects of COVID-19 and related risks is a facts and circumstances analysis, and disclosures should be specific to individual circumstances, avoiding broad or generic language. We summarize and discuss best practices below.

Financial condition and results of operations: Focus on the impact of COVID-19 on near-and-long-term operating results and general financial condition. Update the information related to known “trends” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Liquidity: Discuss the impact on overall liquidity position and liquidity outlook. Disclose if your access to capital and funding sources changed, or is it reasonably likely to change. Consider the requirement to disclose known trends and uncertainties as it relates to your ability to comply with debt covenants or service your debt or other financial obligations.

Balance Sheet Issues: Consider if there will be an effect on the assets on your balance sheet and your ability to timely account for those assets, or if there will be significant changes in judgments in determining the fair-value of assets measured in accordance with U.S. GAAP or IFRS. Disclose if you anticipate any material impairments (e.g., with respect to goodwill, intangible assets or investment securities).

Risk Factors and Operational Issues: Review Risk Factors and other public disclosures related to: demand for products and services, supply chain, workforce, taxation, employee benefits, contingency planning issues, insurance, travel restrictions, market volatility and investment exposure.

Remote Work Issues: Consider if remote work arrangements have adversely affected your ability to maintain operations, including financial reporting systems. Discuss challenges you anticipate in your ability to maintain your systems and controls.