The US Internal Revenue Service (IRS) has granted an automatic filing extension to businesses and individuals affected by Hurricane Harvey, extending tax filing and payment deadlines beginning 23 August 2017 to 31 January 2018
Meanwhile, the Securities and Exchange Commission (SEC) released a statement noting that it is closely monitoring the impact of Hurricane Harvey on investors and capital markets and will evaluate the possibility of granting relief from filing deadlines and other regulatory requirements for those affected by the storm. While there has been no official statement, it is expected the SEC will consider granting relief to those affected by Hurricane Irma as well.
On 25 August 2017, Category 4 storm Hurricane Harvey made landfall, lingering over Texas and Louisiana for several days, producing more than 50 inches of rain and inflicting widespread flooding and damage.
On 10 September 2017, Hurricane Irma, also a Category 4 storm, hit the Florida Keys before moving north to Florida’s southwest shoreline. It has caused extensive wind damage, flooding and power outages both in the US and across the Caribbean, particularly the British and US Virgin Islands, the Leeward Islands, the island of Barbuda and Cuba.
Another hurricane, Maria, is expected to hit the Leeward Islands later today (Monday 18 September) and is projected to follow a similar path to Irma.
For firms and clients affected by the hurricanes, PwC has produced an advisory document for potential disclosures that may need to be made.
In particular, it noted that ‘footnote disclosures may be necessary for losses incurred, insurance claims made and expected insurance recoveries. Companies may also need to disclose information regarding any disputes or uncertainties related to their insurance claims and recoveries’.
It added that in its review of financial statement filings after other natural disasters, such as Superstorm Sandy, the SEC asked registrants affected by the storm to expand their disclosures. Specifically, comments requested expanded disclosure to quantify the effect of the natural disaster on their current period operations, expected future period results and their supply chain.
BVI Finance, the body responsible for marketing and promoting the British Virgin Islands’ financial services industry, said it is ‘moving towards’ business as usual, with many businesses activating their business continuity plans. A significant level of services and operations have continued either ‘on island or via international networks’, it said.
Accountancy firms in the British Virgin Islands include Baker Tilly and Deloitte. Deloitte confirmed all its employees in the affected islands have been located and are safe, and have begun a process of evacuation and relocation of its staff and their families to other islands in which it has operations, primarily Bermuda and Cayman Islands.
It added a full assessment of the recovery effort on the ground is ongoing. In the meantime, it said, its ‘regional business and infrastructure platforms have enabled us to continue serving clients with little interruption and no loss of data’.
Baker Tilly International confirmed its British Virgin Islands firm, Baker Tilly in the British Virgin Islands (Baker Tilly BVI), is closed until further notice. It added all its staff there are safe and accounted for. All enquiries for Baker Tilly BVI are being handled by Baker Tilly in the Cayman Islands, which is hosting Baker Tilly BVI staff for the coming months while the recovery in the British Virgin Islands takes place.
According to the ABI, which represents the UK insurance industry, anyone directly affected by Hurricane Irma should contact their tour operator, travel agent or travel insurer for assistance. They should keep up-to-date with latest travel advice from the Foreign Office, and follow any local authority advice, including evacuation orders. Travel insurers may be able to cover travel disruption, such as additional accommodation costs, if help is not already provided by tour operators.
PwC’s financial reporting advisory document is available here.
Report by Calum Fuller