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Companies walk judgment tightrope as Brexit doubts peak

Tammy Whitehouse | March 27, 2019

Preparers are facing some brutal accounting judgments as they approach the end of a reporting period straddling key dates in a chaotic exit by the United Kingdom from the European Union.

For calendar-year companies, the March 31 close of the first quarter is only days away, falling just a few days ahead of Parliament’s April 12 extended deadline for Brexit. For the sake of numerous financial statement assertions, preparers are required to exercise judgments about their business and economic conditions as of their period close dates, or March 31.

Given the lack of any consensus in the United Kingdom about how its departure from the European Union should occur, how are preparers expected to project, as of March 31, how a U.K. exit from the European Union might affect their businesses?

“I don’t envy CFOs and chief accounting officers who are sitting there saying, ‘What do I think is going to play...

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