Bass Berry & Sims' review of 75 companies' Q1 and Q2 Form 10-Q COVID-19 risk factor disclosures revealed these and other key takeaways, which may inform other companies' approaches in future filings:
- Nearly all of the companies included standalone risk factors related to COVID-19. The few that did not indicated that COVID-19 could exacerbate or heighten the risk factors that were previously included in their Form 10-Ks.
- No companies included an additional standalone COVID-19 risk factor in their Q2 Form 10-Q that was not in their Q1 Form 10-Q.
- Approximately 63% of companies updated their COVID-19 risk factor disclosure from their Q1 filing to their Q2 filing. Updates commonly addressed topics such as uncertainty regarding the duration of the pandemic, impact of the economic downturn, and changes in consumer behaviors during and possibly post-pandemic. Most companies that did not update their Q1 COVID-19 risk factor disclosure in Q2 incorporated their Q1 disclosure by reference.
See the firm's prior posts: "Approaching COVID-19 Risk Factor Disclosure in Upcoming Quarterly Reports on Form 10-Q" and "Reevaluating Risk Factors in Response to COVID-19" and additional resources on our Financial Reporting page. This post first appeared in the weekly Society Alert!