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Corporate turnarounds and impairments
Feature - 3 items
Companies may face financial difficulties for many reasons. Macro economic events, technological transformation, industry trends, and unexpected disruptive events can negatively impact current and projected cash flows.
For many companies, COVID-19 has caused a decline in demand, as well as challenges sourcing raw materials, resulting in revised projections, and the need to consider strategic alternatives.
Clearly communicating the impact of financial stress is critical to meeting the financial statement needs of users. The specific activities a company plans to take, and the expected outcome, can impact the financial statements in current and future periods.
Some of the financial reporting issues companies are facing today include whether to:
- Recognize a charge for the impairment of goodwill, intangible assets, or property plant & equipment
- Present portions of an existing business separately, as a discontinued operation
- Account for renegotiated debt obligations as new arrangements
- Consider bankruptcy or liquidation reporting requirements as a necessary alternative in the most extreme scenarios
Key technical resources
PwC has publications addressing these and other challenges your company may be facing which are discussed in the PwC guide library.
- Asset impairments and disposals - PPE guide chapters 5 and 6
- Discontinued operations - FSP guide chapter 27
- Termination benefits - PEB guide chapter 8
- Intangible and goodwill impairment - BCG guide chapters 8 and 9
- Debt modification and extinguishment - FG guide chapter 3
- Bankruptcy and liquidation - BLG guide
- Fair value measurements - FV guide
Listen to our corporate turnarounds and impairments podcasts
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