Companies affected somehow by recent natural disasters, like hurricanes in the Atlantic and gulf regions, may need to consider the effects on their accounting, financial reporting, and tax compliance.

PwC published an alert to clients to call out a number of potential implications that companies need to consider, like whether a given company needs to expand its disclosures or consider writing down asset values. The firm says the Securities and Exchange Commission historically has asked companies to consider disclosures related to the effects of natural disasters.

In the wake of Hurricane Sandy in 2012, for example, the SEC asked companies to expand their disclosures “to quantify the effect of the natural disaster on their current period operations, expected future period results and their supply chain,” says PwC. If companies are considering adjusting financial results because of the effects of natural disaster, they should keep in mind the SEC’s crack down on the use of “non-GAAP” financial measures.

To assure they don’t run afoul of non-GAAP rules, PwC advises companies to remember that they are prohibited from using non-GAAP measures that are misleading, and they are required to present comparable GAAP measures with “equal or greater prominence,” a point the SEC has emphasized. They are required to reconcile the GAAP and non-GAAP measures, and they are required to explain why they believe the non-GAAP measure is useful.

As for asset impairments, companies should take a look at any goodwill they are carrying on their balance sheet, as well as intangible assets and other long-lived assets to see if values are somehow diminished due to natural disaster. Companies are required to test such assets on an annual basis, but they’re also required to consider any trigger events that might lead to a more timely consideration, and that likely includes the potential effects of a natural disaster.

PwC calls out a number of other potential accounting implications that companies should consider, such as the status of loans or other banking considerations; collectibility of customer receivables, especially for customers also affected by disaster; lease agreements on property that may have been damaged; idle production or vacant facilities due to power outages, fuel shortages or other effects; environmental exposures; and any guarantees or indemnifications that might be affected.

Even further, PwC raises questions about insurance, debt and liquidity, tax, and hedging issues that companies may need to reflect in financial statements. It also raises attention to compliance with the terms of any aid a company might receive, not to mention implications for internal control over financial reporting.

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