The government of Bahrain has set up a committed National Task Force for Combating the Coronavirus and its associated ministries and authorities to handle and implement strategies to limit both the spread of Covid-19 and its impact upon Bahrain’s economy. Spearheaded by the National Task Force, Bahrain conducted a random testing to its residents and expatriates (one of the world’s highest testing rates per capita as acknowledged by the World Health Organization) and has set up an isolated treatment or quarantine facilities. Furthermore, the government of Bahrain is supporting individuals and companies through a comprehensive US$11.4bn economic stimulus package in its aim to stabilise the economy.
Tax measures The Kingdom’s National Bureau for Revenue (NBR) has launched and rolled out a COVID-19 impact assessment survey to assess and understand the impact of COVID-19 outbreak on Bahrain businesses. Social security measures and business support The following are part of the economic stimulus package that aims to support both businesses and individuals:
- The automatic payment of individuals’ and businesses’ Electricity and Water Authority bills for three months from April 2020 (up to the costs incurred during the same period in 2019).
- The payment of all insured Bahraini private sector employees for three months starting April 2020 from the Unemployment Fund, following constitutional procedures and in line with the Social Insurance Law.
- Exempting all individuals and businesses from municipal fees for three months from April 2020.
- Exempting all businesses from government-owned industrial land rental fees for three months from April 2020.
- Terminating monthly work fees and fees for issuing and renewing work permits for three months from April 2020.
- Exempting all tourism-related industry from tourism levies for three months from April 2020.
- Doubling the Liquidity Support Fund to US$530m.
- Increasing the Central Bank of Bahrain’s loan facilities to US$9.8bn to allow debt instalments to be deferred and extra credit to be extended.
- The Ministry of Industry, Commerce and Tourism has extended the filing date for returns due pursuant to the Economic Substance Regulations from 31 March 2020 to 30 June 2020 for those businesses whose financial year ended 31 December 2019.
Employee and employer supportive measures
- Termination of monthly work fees and fees for issuing and renewing work permits for a period of three months from April 2020 as announced by the Labour Market Regulatory Authority (LMRA).
- The redirection of all Tamkeen programmes (semi-autonomous government agency that provides loans and assistance to businesses) to support adversely affected companies, as well as the restructuring of all debts issued by Tamkeen.
- Allowing ministries, entities and government departments to increase the rate of distance work to 70% as a maximum as approved by the Civil Service Bureau (CSB).
Accounting implications For accounting implications, IAS 10 defines adjusting events or events after the reporting period are those events, favourable and unfavourable, that occur between the end of the reporting period and the date when the financial statements are authorised for issue. The two types of events are:
- those that provide evidence of conditions that existed at the end of the reporting period (adjusting events); and
- those that are indicative of conditions that arose after the reporting period (non-adjusting events)
Thus, the situation at 31 December 2019 was that a limited number of cases of an unknown virus had been reported to the World Health Organisation. There was no explicit evidence of human-to-human transmission at that date. These are the conditions that existed at 31 December. The subsequent spread of the virus and its identification as a new coronavirus does not provide additional evidence about the situation that existed at 31 December 2019, and it is therefore a non-adjusting event. The spread of the coronavirus is a non-adjusting event. However, events after the reporting date sometimes provide additional information about the uncertainties that existed at the reporting date. Judgement might be required in some situations; for example, the bankruptcy of a customer subsequent to the reporting date might reflect existing issues beyond the spread of the coronavirus. Going concern The standard states that the financial statements should not be prepared on a going concern basis where events after the reporting date indicate that the going concern assumption is no longer appropriate. This guidance applies even if those events would otherwise be non-adjusting. Entities should therefore consider whether developments subsequent to the reporting date have any implications for the going concern assumption. Disclosure Non-adjusting events do not result in adjustment to the financial statements, but they do require disclosure if material. This disclosure should be transparent and specific to the entity, and it should include the nature of the event and an estimate of its financial effect. Entities should consider disclosing the impact of developments after the reporting date on the carrying amount of assets and liabilities (eg. the need to impair assets or remeasure fair values), or the impact on revenue or on borrowing covenants. Others
- As part of the precautionary measures to combat the novel coronavirus (COVID-19), the Ministry of Interior bans gatherings of more than five individuals on roads, yards, beaches, parks and other public places.
- The Health Minister suspends the BD7 medical consultation fee on health fees for non-Bahrainis.
- Some hospitals launched the home delivery service of prescribed medicines to ensure the health, safety and comfort of the patients.
- The Information and eGovernment Authority launched the “BeAware Bahrain” application which advances contact tracing efforts to identify and track active cases of COVID-19.
Click here to learn more.