TMT insights: Financial reporting and accounting quarterly - Q2 2025

A PwC report on emerging trends affecting technology, media and telecommunications companies.

In this edition

  • TMT executives anticipate sustained geopolitical disruptions, prompting substantial adjustments in supply chain strategies.
  • Companies accelerate AI integration with over $300 billion projected in infrastructure and hardware investments this year.
  • Strategic dealmaking resurges, with a focus on acquiring capabilities in AI, cloud and cybersecurity.
  • FASB targets issuance of multiple new standards in the upcoming months that TMT companies may want to consider for early adoption, including guidance on capitalized internal-use software, hedge accounting and the definition of a derivative.
  • New tax updates and upcoming income tax disclosure requirements mandate enhanced reporting, prompting early preparation.
  • The SEC introduces key leadership changes with new Chairman Paul Atkins and Chief Accountant Kurt Hohl.
  • Sustainability reporting faces shifts in timing due to EU regulatory adjustments, requiring strategic realignment for affected TMT companies.

Issue spotlight

Stay ahead of the curve as we look toward Q3 with updates on geoeconomic factors impacting sector supply chains, M&A activity, key accounting standards coming into effect, significant regulatory appointments — and more.

Issue spotlight image

Business update

What are TMT leaders focused on heading into the second half of 2025? One word: uncertainty. Yet amid macroeconomic volatility and a shifting global landscape, many remain constructively optimistic. Trade realignment, AI acceleration and regulatory pressures are reshaping the technology, media and telecommunications sector in real time. In response, companies are making decisive moves — adjusting supply chains, adopting emerging technologies and reevaluating their deal pipelines. Here’s a look at the trends shaping the path forward.

TMT business update

Supply chains shift as global dynamics evolve

Geopolitical friction and trade policies have become core to business strategy. In PwC’s May 2025 Pulse Survey, 60% of TMT executives expect continued macro and geopolitical disruption through 2026. Still, over one-third anticipate more opportunity than challenge in the year ahead — reflecting a recalibrated focus on resilience and long-term value.

Fragmentation is driving new sourcing models. While protectionist policies present near-term hurdles, 79% of executives expect long-term benefit. Companies are revisiting their global footprints: 40% are increasing US sourcing, 29% are relocating operations from China to the US and 21% are shifting production to countries with lower tariffs.

Automation is also accelerating. Tariff-driven cost increases are motivating investment in robotics and localized manufacturing. And as of June, PwC estimates that pending tariffs could push TMT import costs from $13 billion to $126 billion in 2025, underscoring the need for agile trade planning.

To navigate, firms are fast-tracking regional supply strategies and scaling semiconductor investments in new geographies. But a regionalized model introduces complexity. Differing regulatory regimes and tariff codes demand tighter coordination. Leading firms are enhancing collaboration across functions and using scenario analysis to map outcomes and support smarter decisions. The result: more resilient, more responsive supply chains.

Accounting update

In this issue, we provide updates on recent and upcoming FASB releases and highlight the income tax disclosure standard effective in 2025 for calendar-year filing public companies.

TMT accounting update

FASB activity heating up

The FASB has continued to make headway on its current technical agenda, with two new final accounting standards issued in May (discussed below) and more to come in the upcoming months. Be on the lookout for the following final standards expected to be issued before the end of year:

  • Capitalized internal-use software costs (read our publication here)
  • Hedge accounting improvements (read our publication here)
  • Derivative scope refinements (read our publication here)
  • Government grants (read our publication here)
  • Credit losses – ASC 606 receivables
  • Credit losses – purchased financial assets

While TMT companies will not be required to adopt these new standards in 2025, some may want to consider early adoption of certain of these new 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

FASB issues proposal on accounting for debt exchanges

In April, the FASB issued a proposed standard that would require an exchange of debt instruments involving multiple creditors that meet certain requirements to be accounted for by the debtor as the issuance of a new debt obligation and an extinguishment of the existing debt obligation. When those requirements are met, an entity would not need to perform a quantitative analysis of the change in cash flows to determine if the transaction should be accounted for as (1) a modification of the existing debt or (2) the issuance of new debt and the extinguishment of the existing debt.

Read our publication, FASB proposes to simplify accounting for certain debt restructurings, for further information.

Determining the accounting acquirer in VIE acquisitions

In May, the FASB issued ASU 2025-03, Determining the Accounting Acquirer of a Variable Interest Entity. The standard revises the guidance for determining the accounting acquirer when a variable interest entity (VIE) is acquired in a business combination effected primarily by exchanging equity interests. Previously, the party that consolidates the VIE (i.e., the primary beneficiary) was always identified as the accounting acquirer in such transactions. Under the new guidance, companies should consider the same factors that exist for other business combinations effected through exchange of equity interest where it is not clear which party is the acquirer. The new standard takes effect in 2027 for all calendar year-end entities (including interim reporting periods). Early adoption is permitted. The guidance is required to be applied prospectively to any acquisition that occurs after the initial application date.

Share-based consideration payable to a customer

In May, the FASB issued ASU 2025-04, Clarifications to Share-Based Consideration Payable to a Customer, in order to reduce diversity in practice and improve operability of the guidance around share-based consideration granted to customers. For these award types, the amendments expand the definition of a “performance condition”, require the estimating of forfeitures when the awards have service vesting conditions and clarify the guidance for measuring the award. The new standard is effective for all calendar-year entities in 2027 (including interim periods) with early adoption permitted.

Read our publication, FASB issues guidance on share-based consideration payable to a customer, for further information.

Income tax disclosures and other updates

The FASB’s new standard on income tax disclosures, ASU 2023-09, Improvements to Income Tax Disclosures, will be effective for calendar-year public companies in their 2025 annual reports.

The new guidance focuses on two specific disclosure areas:

  1. A disaggregated effective tax rate reconciliation
  2. A break-down of income taxes paid by jurisdiction

Given the magnitude of changes to income tax disclosures as compared to the existing requirements, we recommend companies start now to develop the processes and systems to gather the data and implement controls over the disclosures. Starting early can also help entities assess the extent of comparability of results for prior periods, which may influence the decision to adopt the disclosure prospectively or retrospectively.

Read our publication, FASB issues guidance on income tax disclosures, for further information. And read about the experiences and learnings of early movers on this disclosure in Closing statements: Insights for controllers at quarter end.

President Donald J. Trump on July 4 signed into law H.R. 1, the “One Big Beautiful Bill Act.” The bill was passed by the House on July 3 by vote of 218 to 214. The bill was passed by the Senate on July 1 by a vote of 51 to 50, with the tie-breaking vote of Vice President JD Vance. H.R. 1 contains significant tax law changes with various effective dates affecting individual and business taxpayers, including some provisions with effective dates tied to the bill’s July 4 date of enactment.

Read our Tax Insights and In Depth publications for details on the contents of the bill and accounting considerations, respectively.

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.

TMT regulatory update

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 technology, media and telecommunications companies in the 12 months ended March 31, 2025, (1) non-GAAP measures, (2) management’s discussion and analysis, (3) revenue, (4) segment reporting 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.

SEC Chairman sworn in and Chief Accountant named

On April 21, Paul Atkins was sworn in as the 34th Chairman of the SEC. He joined SEC commissioners Hester Peirce, Caroline Crenshaw and Mark Uyeda, who had served as Acting Chairman since January. Mr. Atkins previously served as an SEC commissioner from 2002 to 2008.

On June 13, the SEC announced that Kurt Hohl will become Chief Accountant at the SEC effective July 7. Mr. Hohl was previously a partner at a big four accounting firm and earlier in his career had served in the SEC’s Division of Corporation Finance. The SEC also filled several other senior staff positions in the first half of June, including Directors for the Division of Trading and Markets and the Division of Investment Management.

SEC solicits public comments on the definition of “foreign private issuer”

On June 4, the SEC published a concept release soliciting public comment on the definition of “foreign private issuer” in advance of potential SEC rulemaking. A change in the definition would likely decrease the number of companies that qualify as foreign private issuers (FPIs), particularly those that have direct listings in the United States and are not traded on other exchanges (primarily entities incorporated in the Cayman Islands and headquartered in China). Approaches to update the existing FPI definition could include: updating existing FPI eligibility criteria; adding a foreign trading volume requirement; adding a major foreign exchange listing requirement; incorporating an SEC assessment of foreign regulation applicable to the FPI; establishing new mutual recognition systems; or adding an international cooperation arrangement requirement.

New York proposes mandatory GHG reporting for large emitting sectors

New York State’s Department of Environmental Conservation (DEC) released a draft regulation proposing a mandatory greenhouse gas (GHG) emissions reporting program. The regulation would require annual reporting of emissions and related data to the DEC by suppliers of liquid fuels, natural gas, coal, electric power and other commodities to end users in New York state as well as electricity generation, stationary combustion, landfills, waste to energy, natural gas compressor stations, and other infrastructure facility owners and operators if certain emission thresholds are met. Reporting under the proposal would begin in 2027 based on the prior year’s data and would include third-party verification requirements in the initial year of reporting for certain entities.

“Stop-the-clock” directive officially postpones timing of CSRD and CSDDD for “wave 2” and “wave 3” companies

On April 16, the “stop-the-clock” directive to postpone sustainability reporting under the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) was published in the Official Journal of the EU, entering into force on April 17. This directive postpones the CSRD for two years for those entities not yet required to provide such disclosures and postpones the CSDDD by one year. Member States have until December 31, 2025 to transpose the directive into national law. The focus of the Council of the European Union and the European Parliament will now turn to the second Omnibus proposal, expected to affect the scope and content of the CSRD and content of the CSDDD.

For more on the EU Omnibus package, read our publication and watch our video podcast.

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.

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Conall Dempsey

Conall Dempsey

Technology, Media and Telecommunications Assurance Leader, PwC US

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