Natural disasters can have adverse implications for the business landscape. Disasters often lead to significant property damage, operational disruptions, and indirect economic consequences. Beyond the human toll, there are also the accounting implications of natural disasters. Financial reporting after disasters poses several issues, including the recognition of losses, measurement challenges, and disclosure requirements.
Recognition of losses requires identifying losses that directly affect assets, liabilities, and equity positions.
The measurement of losses must accurately reflect the disaster’s direct and indirect effects