Virus Accounting Maneuvers Criticized by European Authorities

Europe’s top markets watchdog is warning companies against getting creative with financial statements that obscure the effect of the coronavirus pandemic on their bottom line.

In guidance ahead of companies’ half-year results, the European Securities and Markets Authority said on Wednesday that firms shouldn’t separate the impact of the virus from overall profits and losses.

Publishing separate statements would “not faithfully present issuers’ overall financial performance, position and/or cash flows, thus being to the detriment of users’ understanding,” ESMA said. Issuers instead should provide information about the impact of the outbreak in an explanatory note, the Paris-based regulator said.

The ...