Financial reporting considerations related to the war

On 17 March 2022, Deloitte’s Global Office issued a 26 pages publication titled “IFRS in Focus – Financial Reporting Considerations Related to the Russia-Ukraine War”.

The geopolitical situation in Eastern Europe intensified on 24 February 2022, with Russia’s invasion of Ukraine. The war between the two countries continues to evolve as military activity proceeds and additional sanctions are imposed.

Current situation affects entities that have operations in Russia, Ukraine, or neighbouring countries (e.g. Belarus) or that conduct business with their counterparties, the conflict is increasingly affecting economic and global financial markets and exacerbating ongoing economic challenges, including issues such as rising inflation and global supply-chain disruption. Because of its broader impact on these macroeconomic conditions, many entities globally may need to consider the effects on certain accounting and financial reporting matters.

The IFRS in Focus discusses some of the key impacts of the current situation that entities need to consider, which include:

  • Interruptions or stoppage of production in affected areas and neighbouring countries.
  • Damage or loss of inventories and other assets.
  • Closure of roads and facilities in affected areas.
  • Supply-chain and travel disruptions in Eastern Europe.
  • Volatility in commodity prices and currencies.
  • Disruption in banking systems and capital markets.
  • Reductions in sales and earnings of business in affected areas.
  • Increased costs and expenditures.

It is important that entities consider their direct and indirect exposures to the impacts of the war and consider the financial accounting and reporting implications, which could be numerous, particularly for entities with material subsidiaries, operations, investments, contractual arrangements, or joint ventures in Ukraine and Russia. Entities with significant suppliers, vendors, or customers in Ukraine or Russia, as well as organisations that lend to or borrow from entities in those countries, also may experience accounting challenges. Even entities that do not have direct exposure to Ukraine or Russia are likely to be affected by the overall economic uncertainty and negative impacts on the global economy and major financial markets arising from the current conflict.

The publication in English is available here.

Source: IFRS in Focus — Financial reporting considerations related to the Russia-Ukraine War (
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