TMT sector game changers

A biannual report highlighting new accounting and reporting trends affecting the Technology, Media and Telecommunications (TMT) industries.

July 2018 edition: Key highlights

Despite the uncertainties and speculation on how the market would respond to the new tax reform and questions surrounding government regulation on cross-border deals, tariffs, and cybersecurity, the Technology, Media and Telecommunication sector continues to have an appetite to spend big dollars to acquire premium content and enhance technological capabilities with a number of megadeals. Consistent with recent trends, PwC analysis shows that deal volume increased across TMT in the first quarter of 2018. Tech deals continue at a brisk pace, with over 500 deals announced, and EMC deal volumes increased to 244 deals, the highest quarterly volume level for the last two years.

Most calendar year public business entities have adopted ASC 606. We explore further to find out how companies are coping with the implementation of the revenue standard and collected responses from more than 600 executives in an open online survey. Additionally we reviewed 50 public companies in the TMT sector that have adopted ASC 606 and summarized our findings of the impact and disclosures in this section.

We explore the recent US tax reform developments in addition to providing considerations to companies that are finalizing their accounting for the impacts of tax reform. In this section, we also spotlight the new lease accounting rules through our In the loop series.

The Emerging Issues Task Force reached a final consensus that implementation costs associated with cloud computing arrangements that are considered a service contract should be evaluated for capitalization using the same model. In this section we summarize the EITF’s discussion on how the related expense and capitalized costs should be presented in the financial statements and disclosure considerations.

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Kevin Healy
US TMT Industry Assurance Leader, PwC US
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