On March 11, 2011, an earthquake struck off the northeast coast of Japan, triggering a tsunami. The power supply in certain parts of Japan has been cut-off with rolling blackouts scheduled in other areas. Further compounding the situation, nuclear power plants were damaged causing worries about the possible meltdown of nuclear reactors and the release of harmful radioactive materials. These tragic events have severely disrupted the Japanese economy, the third largest in the world. The disruption will likely affect the rest of the world, potentially slowing global economic growth, disrupting trade, and putting pressure on commodity prices. Many companies have ties to Japan, and whether those ties are through subsidiaries, suppliers, or customers, the impact will be deeply felt.
Companies may face a host of accounting and disclosure issues resulting from these events. While not all-inclusive of the types of issues that may be created by these events, this Dataline discusses several accounting and disclosure-related matters companies may encounter in dealing with the financial reporting implications of these tragic events. Also included are links to where you can get additional guidance on the applicable matters.