This blog explores how the conflict may affect your financial reporting for the 31 December 2025 year-end and the current interim period.
Considerations for the current/future reporting period
Since the conflict began on 28 February 2026, it does not affect the financial statements for the year ended 31 December 2025. The figures already recognized in the 2025 financial statements should remain unchanged; any impact will be reflected in the current reporting period instead.
However, if your 2025 financial statements have not yet been issued, the conflict may still affect your assessment of the company’s ability to continue as a going concern. We’ll cover this in more detail below.
1. Supply Chain Disruptions and Operational Risks
Global supply chains are under real pressure, especially for the companies that depend on goods moving through the region. If your business relies on materials or products passing through the Strait of Hormuz, you might face delays, higher costs, or shortages. It’s important to be open about these challenges and to explain to your stakeholders how you’re responding.
2. Cashflow Risks
Uncertainty from the conflict can quickly put pressure on your cash flow. Currency swings, interest rate changes, and liquidity challenges may disrupt your ability to meet day-to-day obligations or fund ongoing operations. If you are exposed to affected currencies or markets, now’s the time to review your risk management strategies and make sure you’re disclosing how you’re handling these challenges.
3. Asset Impairment
Operational disruptions, lost customers, or supply chain issues can reduce the value of your assets. Check for impairment in goodwill, inventory, and receivables. If you find signs that these assets have lost value, you might need to recognize those losses in your financial statements. It’s not just a compliance step - it’s about presenting a true and fair view of your company’s position.
4. Investments and Market Volatility
Financial markets are feeling the effects of the conflict, and your investments may be impacted. If you hold shares, bonds, or stakes in other companies, pay attention to shifts in their fair value. Market volatility, increased credit risk, or liquidity concerns can all impact your investment portfolio. If these changes are significant, make sure to disclose them clearly in your financial statements. Transparent reporting builds confidence and trust.
5. Going Concern Assessment
Assessing your company’s ability to continue as a going concern is important. If the conflict has shaken your business model or raised doubts on your ability to keep operating, you need to take a look at your assumptions. If your financial statements aren’t issued yet, new events can change the picture. Be transparent about any uncertainties and explain the steps you’re taking to address them.
6. Environmental and Sustainability Reporting
Don’t overlook the environmental and sustainability angle. If the conflict has affected your environmental risks or changed your sustainability profile, reflect this in your reporting. Whether it’s new challenges in sourcing sustainable materials or increased emissions from rerouted logistics, transparency here is key.
Summary and our thoughts
The war in Iran is creating real challenges for businesses—from supply chain disruptions and cashflow risks to asset impairment and investment volatility. It’s important to stay alert, adapt quickly, and be open about how these issues are affecting your company. Transparent reporting, honest risk assessments, and a proactive approach to sustainability will help you navigate uncertainty and build trust with your stakeholders.
The conflict in Iran may present many financial reporting challenges in 2026, potentially impacting 2025 annual reporting as well as interim reporting in 2026. As with many significant global events in recent years, we encourage those charged with governance to carefully assess both the direct and indirect economic consequences of this conflict. If you think you may be impacted by this or would like to discuss these issues and considerations further, please reach out to your contact at Grant Thornton.