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In this edition
Technology, media and telecommunications (TMT) companies are shifting to regionally attuned models to manage geopolitical risk and unlock localized growth.
AI execution gaps persist, with 70% of leaders fearing market share loss — yet only 23% have a data-backed view of the impact.
Deal momentum is building, with buyers using AI to sharpen diligence and accelerate integration strategies.
FASB modernizes software cost guidance, aligning capitalization triggers with agile development.
New CECL update offers a shortcut, simplifying credit loss estimates for receivables and contract assets.
SEC comment letters focus on key disclosures, including non-GAAP metrics, MD&A and segment reporting.
Climate disclosure rules are on hold, as courts pause litigation and the SEC reevaluates its next move.
Stay ahead of the curve as we look toward Q4 with updates on geopolitical fragmentation, deal momentum in the AI economy, new guidance on software and credit losses, evolving regulatory priorities, and more.
Business update
As technology, media and telecommunications (TMT) leaders navigate Q3 2025 and beyond, they face a dual reality: ongoing uncertainty and emerging opportunity. Geopolitical fragmentation, AI disruption and shifting consumer expectations continue to challenge established models. At the same time, deal activity is showing early signs of renewed momentum. TMT leaders are refining execution focus — doubling down on resilient supply chains, monetization innovation and investor-style discipline in decision-making.
Accounting update
In this issue, we include reminders about the impacts of recent provisions for tax releases, and highlight new and upcoming accounting standards.
The FASB updates its technical agenda periodically, generally when significant milestones are achieved on individual projects. Refer to the agenda for the latest updates.
New and upcoming accounting standards
- Derivatives scope refinement
In September, the FASB issued ASU 2025-07, Derivative Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract, which adds a new scope exception to the derivatives guidance for contracts (or embedded features) with payments based on the operations or activities specific to one of the parties of the contract. The new guidance will reduce the number of contracts (or embedded features within instruments) that are accounted for under ASC 815, Derivatives and Hedging. The new guidance also clarifies that share-based noncash consideration received in exchange for the transfer of goods or services to a customer is accounted for under ASC 606, Revenue from contracts with customers, unless or until the company’s right to receive or retain the share-based noncash considerations is “unconditional,” as defined by the new standard.
The new guidance will be effective for periods beginning after December 15, 2026. The guidance can be applied on a prospective basis or a modified retrospective basis.
Read our publication, FASB updates derivative and revenue scope, for further information.
Software costs
In September, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software, to modernize the accounting guidance for the costs to develop software for internal use. The new guidance amends the existing standard that refers to various stages of a software development project to align better with current software development methods, such as agile programming.
Under the new standard, entities will start capitalizing eligible costs when (1) management has authorized and committed to funding the software project, and (2) it’s probable that the project will be completed and the software will be used to perform the function intended. In evaluating whether it’s probable the project will be completed, an entity is required to consider whether there is significant uncertainty associated with the development activities of the software.
The new guidance will be effective for all entities for annual periods beginning after December 15, 2027. The guidance can be applied on a fully prospective basis, a modified basis for in-process projects, or a full retrospective basis.
Read our publication, FASB updates software cost guidance, for further information.
Measurement of certain credit losses
In July, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides guidance for estimating credit losses under the current expected credit losses (CECL) model for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from contracts with customers. Under the new standard, when developing forecasts as part of estimating expected credit losses, entities can elect a practical expedient that assumes that current conditions as of the balance sheet date don’t change for the remaining life of the asset. Additionally, non-public companies that elect this practical expedient can also make an accounting policy election to consider collection activity after the balance sheet date when estimating expected credit losses.
The guidance is effective for periods beginning after December 15, 2025, and will be adopted prospectively, with early adoption permitted.
Read our publication, FASB provides practical expedient for CECL, for further information.
Income tax disclosures
We’re just a few months away from the FASB’s new standard on income tax disclosures, ASU 2023-09, Improvements to Income Tax Disclosures, becoming effective for calendar-year public companies in their 2025 annual reports.
The new guidance focuses on two specific disclosure areas:
A disaggregated effective tax rate reconciliation
A break-down of income taxes paid by jurisdiction
Given the magnitude of changes to income tax disclosures compared to the existing requirements, we recommend companies get a head start on developing the processes and systems to gather the data and implement controls over the disclosures. This will allow sufficient time to review and evaluate draft copies of the new disclosure.
Read our publication, FASB issues guidance on income tax disclosures, for further information.
For a complete list of recently issued accounting standards and their effective dates, including links to PwC resources, refer to the Guidance effective for calendar year-end public companies and Guidance effective for calendar year-end nonpublic companies pages on Viewpoint.
Regulatory update
On the regulatory front, we provide updates on SEC activity and sustainability reporting across multiple frameworks.
SEC Comment letter trends
The SEC Division of Corporation Finance's filing review process monitors the disclosures made by registrants. Based on the analysis of comment letters publicly issued to TMT companies in the 12 months ending on June 30, 2025, (1) non-GAAP measures, (2) management’s discussion and analysis, (3) segment reporting, (4) revenue recognition and (5) goodwill and other intangibles generated the highest volume of SEC comments.
Check out our summary of current comment letter trends for TMT companies.
Spring 2025 regulatory agenda released
In September, the Office of Information and Regulatory Affairs released the Spring 2025 Regulatory Agenda (the “Reg Flex” agenda). The Reg Flex agenda is published semi-annually and includes a list of potential rule proposals and the status of rulemaking activities by government agencies, including the SEC.
In a statement, SEC Chairman Atkins emphasized that the items on the SEC’s agenda “represent the Commission's renewed focus on supporting innovation, capital formation, market efficiency, and investor protection.”
Areas of potential SEC rulemaking include projects to simplify pathways for raising capital, provide regulatory clarity for the issuance, custody, and trading of crypto assets, enhance accommodations available to emerging growth companies (EGCs), and to simplify the determination of filer status.
SEC names new Directors of Enforcement and Corporate Finance
On August 22, the SEC announced that Judge Margaret "Meg" Ryan has been named the Director of the Division of Enforcement. Prior to serving as a senior judge of the United States Court of Appeals for the Armed Forces, Judge Ryan served as a partner at two law firms and as a law clerk to Supreme Court of the United States Associated Justice Clarence Thomas. More recently, Judge Ryan has served as a lecturer and professor at three law schools.
On September 10, the SEC announced that James Moloney has been named Director of the Division of Corporation Finance, effective in October. Mr. Moloney previously worked at the SEC from 1994 to 2000, including as a special counsel in the Office of Mergers & Acquisitions in the Division of Corporation Finance. Since then, he has been a law partner working on securities regulation and corporate governance.
SEC names PCAOB Acting Chair and seeks candidates for all board roles
In July, the SEC announced that George Botic would serve as the Acting Chair of the PCAOB, following Chair Erica Williams’ resignation. SEC Chairman Paul Atkins later issued a statement seeking candidates for all five PCAOB board roles, including the Chairperson. Mr. Botic has served as a PCAOB board member since October 2023, and prior to joining the Board, served as the Director of the PCAOB’s Division of Registration and Inspections as well as in various other roles at the PCAOB.
SEC updates Financial Reporting Manual
In August, the SEC’s Division of Corporation Finance published an update to the Financial Reporting Manual (FRM). The updates reflect revisions related to the 2021 amendments to MD&A, selected financial data, and supplementary financial information, recent standards issued by the PCAOB, and the 2020 amendments to Regulation S-X related to acquisitions and dispositions of businesses (including foreign businesses and foreign private issuers). A summary of the recent changes to the FRM is available on the SEC’s Financial Reporting Manual page.
Court pauses SEC climate disclosure rules litigation
In September, the US Court of Appeals for the Eighth Circuit paused its consideration of legal challenges to the SEC’s climate-related disclosure rules, pending further action by the SEC. The SEC had previously communicated to the Court that it did not intend to review or reconsider the rules and asked the Court to decide the case before the SEC commits to a course of action.
The Court’s order highlighted that “it is the [SEC’s] responsibility to determine whether its Final Rules will be rescinded, repealed, modified or defended in litigation,” effectively sending the matter back to the SEC to determine whether it will defend, amend, or withdraw the rules.
About PwC’s TMT industry practice
Our TMT practice is dedicated to helping business leaders in the technology, media and telecommunications industries manage their complex businesses while delivering sustained outcomes. In doing so, we offer a range of capabilities, including risk, transformation, cloud and digital, deals, sustainability, cybersecurity and privacy, governance and boards, tax services, and much more. We are committed to advancing quality in everything we do.
TMT insights Q3 2025
Financial reporting and accounting quarterly
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