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By Sabela Ojea
--The Financial Reporting Council urges companies and auditors to provide information on coronavirus risks when reporting year-end results
--Assets and liabilities could also be affected by the virus
--Apple Inc. on Monday warned on its revenue projections for the current quarter over coronavirus concerns
The Financial Reporting Council said Tuesday that companies and auditors should provide up-to-date information on the risks arising from novel coronavirus when reporting their year-end results.
The British regulator said that, as companies have to make public principal risks to their business by law, those who either operate in or have close trading associations with China should report the possible impact of Covid-19 on their business.
"Companies will need to monitor developments and ensure they are providing up-to-date and meaningful disclosures to their shareholders when preparing their year-end reports," a spokesperson said.
The FRC issued the advice to companies and auditors that have "significant" trading links or global supply chains dependent on Chinese-manufactured goods will need to consider their disclosures if their businesses face possible disruption.
"Depending on the extent to which the virus spreads outside of China, other companies could also become affected," the FRC said.
Year-end balances of those companies whose financial years end after Dec. 31 could be affected by the coronavirus, the FRC said.
The financial regulator also warned on the carrying value of assets and liabilities, which could also be affected with a need to perform additional impairment tests and to assess whether leases have become onerous.
"Where mitigating actions can be taken, these should also be reported alongside the description of the risk itself," the regulator added.
Apple Inc. became on Monday the first major US company to announce that it didn't expect to meet its revenue forecasts for the current quarter due to the coronavirus outbreak, which it said had limited iPhone production for worldwide sales and curtailed demand for its products in China.
Write to Sabela Ojea at email@example.com; @sabelaojeaguix
(END) Dow Jones Newswires
February 18, 2020 10:13 ET (15:13 GMT)
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