As the pandemic rages on, financial leaders are not only finding their responsibilities becoming more diverse — they must also carry out their duties in a highly unpredictable, increasingly opaque environment.
The economic impact of closed borders, social distancing, and economic stimulus programs — not to mention the raw human impact of the virus — have increased pressure on treasury professionals across the board, forcing them to seek additional resources to fully support company initiatives, especially in tracking risks.
Assessing exposure, however, is not the task it once was, with many traditional metrics no longer effective or meaningful. Companies must now quantify their diversification, taking into account the impact of FX rate volatility on liquidity risk and earnings risk. In many cases, this challenge is amplified by leadership demands to increase funding, reduce expenditure, or defer costs.
Ramifications are also significant for tax accounting oversight. As well as possible expanded disclosures, tax accounting has been complicated by forced adjustments to tax provisions as the impacts of the pandemic and associated economic disruptions are more fully understood.