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In this edition
- Signals of recovery surfaced in technology, media, and telecommunications (TMT), as improving credit conditions and emerging technologies drove strategic activity despite ongoing geopolitical and consumer shifts.
- TMT deal activity picked up late in 2025, supported by easing financing costs, portfolio reshaping, and stronger demand for premium technology assets.
- The FASB issued several new accounting standards, including guidance on purchased seasoned loans, hedge accounting, and government grants.
- New income tax disclosure requirements take effect for calendar-year public companies in 2025, expanding effective tax rate reconciliations and disclosures of income taxes paid by jurisdiction.
- Most common SEC comment letters focused on non-GAAP measures, management’s discussion and analysis, segment reporting, revenue recognition and goodwill, and other intangibles.
- SEC disclosure priorities continue to evolve, and AI’s growing influence on reporting and the push for stronger governance were standout themes at the 2025 AICPA & CIMA Conference.
Business update
As we head into 2026 and look back on Q4 of 2025, signals of recovery are surfacing across technology, media and telecommunications (TMT). Despite geopolitical shifts and continued changes in consumer behavior, improving credit conditions and next-gen technologies are spurring more strategic activity. Finance leaders are navigating the moment with renewed focus––balancing capital discipline, deal optionality, and emerging automation opportunities to deliver stronger outcomes faster.
Dealmaking: Activity accelerates with discipline and direction
TMT deal volume picked up late in 2025, with several high-profile transactions that demonstrate investor confidence is returning. Easing financing costs, portfolio reshaping, and a growing appetite for premium tech assets helped drive a 61% increase in media and telecom deal value from the second half of 2024 to the second half of 2025, and that doesn’t account for the enormous Netflix deal in the works. Driven by AI, technology deals are shifting toward acquiring data, compute, and talent, which is transforming how organizations approach capital deployment and platform strategy.
TMT now accounts for nearly a third of US deal value, with technology capabilities––especially AI and cloud—seen as foundational for growth across sectors. Hundreds of billions of dollars have been poured into AI investments, from data centers and microchips to new software development. Even amid concerns over a potential stock market bubble, AI is significantly accelerating software and consumer goods development. In media, creative deal structures are emerging, with firms in that sector considering JVs or minority investments to acquire content and tech without overextending. Telecoms are leveraging carve-outs and vertical integration to fund infrastructure. Finance leaders across TMT are well-positioned to help identify divestiture candidates and guide working capital back to growth.
The IPO market sprang to life early in the second half of 2025 with investors eagerly greeting new offerings. That pent-up demand, plus interest rate trends and growing stability around trade policy, should bode well for 2026 IPOs.
Through November 30, a total of 72 traditional IPOs raised $33.6 billion—surpassing the full-year totals of 2024 (62 IPOs; $27 billion), 2023 (35 IPOs; $17.7 billion), and 2022 (28 IPOs; $7.1 billion). SPAC issuance also posted its most active stretch since 2021, with 122 SPACs raising over $22 billion.
Unfortunately, the strong run hit a significant speed bump due to the government shutdown, which we expect will have several important consequences. Regulators will need to clear a sizeable backlog; the SEC said issuers filed more than 900 registration statements during the shutdown. IPO candidates and others wishing to access the capital markets should expect delays as the SEC works through accumulated filing reviews.
This backlog will be exacerbated by pent-up demand. Companies that delayed filings during the shutdown may try to list quickly, particularly AI or tech firms that want to capitalize on favorable valuations before any potential policy shifts. The first few IPOs of 2026 may also see conservative pricing as markets recalibrate, followed by potential premium valuations for high-quality issuers as confidence rebuilds.
Technology, healthcare, and industrial products are all likely focus sectors for the US IPO market in 2026. If the macro environment and trade policy continue to stabilize, 2026 has the potential to be the best issuance window in years.
The bottom line? Rigor, selectivity, and strategic alignment are setting the tone for 2026 deal activity. Controllers can enable success by making sure each deal ties to long-term innovation and profitability goals. Despite several potential challenges, we believe the current M&A uptick rests on solid ground. If trade policy stabilizes, interest rates drop, and AI enthusiasm continues, we expect the market to build on the significant gains it made in 2025. While value growth may stabilize, we expect volume to pick up if macro-economic drivers and renewed confidence help push both middle-market corporates and PE firms back into the M&A arena. Read more in our US Deals 2026 Outlook.
Revenue recognition: Complexity rises as business models evolve
As more TMT companies shift to subscription- and usage-based revenue, accounting teams are encountering fresh challenges under ASC 606. From implementation services and tiered pricing to material rights in renewals, the path to compliant and consistent revenue reporting increasingly hinges on nuanced judgment.
Usage-based pricing adds layers of complexity, particularly when it comes to assessing performance obligations, applying variable consideration, and recognizing revenue in the correct periods. Likewise, customer incentives like equity or warrants may introduce nonstandard accounting treatments that significantly affect results.
Look to strengthen your organization’s contract review protocols and align policies upfront with business model changes. Clear guidance around estimates, renewals, and tiered usage can reduce restatement risk. Cross-functional coordination is also key, helping sales and product teams understand how contract language impacts accounting outcomes. Timely updates to assumptions and thorough documentation will help finance teams stay ahead of volatility in consumption or churn.
Getting these judgments right means maintaining compliance and building trust in financial reporting, giving investors clarity as new monetization models scale.
AI: Finance is shifting from pilots to performance
In 2025, many organizations experimented with AI, but only a few turned those efforts into meaningful business impact. We predict that will change in 2026. We’re seeing leaders across industries, including TMT, focusing on turning proof of concept into sustained performance, especially in finance and tax functions.
Business leaders are concentrating AI efforts on a few priority workflows—like automated forecasting or close processes—and resourcing them with top talent. This focused approach is helping move from experimentation to scale. And it’s backed by strong governance: leading teams are building centralized AI platforms with clear testing, monitoring and human-in-the-loop oversight.
For TMT finance leaders in 2026, success will depend on discipline. AI investments are being scrutinized for measurable financial benefit, and finance leaders are expected to show real gains in efficiency, speed or insight. AI agents offer exciting potential to automate complex finance processes, but they require the right guardrails. Clear accountability, documented controls and human review—especially for higher-risk use cases—remain essential.
Going forward, treat AI like any major investment. Set clear objectives, track financial impact, and embed AI within broader transformation goals. With the right focus, you can help unlock real value for your organization and build lasting confidence in AI-enabled finance.
Accounting update
In this issue, we highlight new accounting standards issued in Q4 and include reminders about the upcoming income tax disclosure standard.
New accounting standards
- Purchased seasoned loans
In November, the FASB issued ASU 2025-08, Purchased Loans, which introduces a new model to account for the initial allowance for credit losses recognized upon acquisition on certain purchased loans (now defined as "purchased seasoned loans"). Under the new model, the initial allowance for credit losses recognized upon acquisition of certain loans that have not experienced a more-than-insignificant credit deterioration since origination and are deemed seasoned will be recorded as an adjustment to the amortized cost basis of the loan, as opposed to in earnings.
The new guidance will be effective for periods beginning after December 15, 2026 for all entities and applied on a prospective basis.
Read our publication, FASB issues guidance on purchased seasoned loans, for further information.
- Hedge accounting improvements
In November, the FASB issued ASU 2025-09, Hedge Accounting Improvements, which makes targeted but impactful changes to the hedge accounting model to better portray the results of risk management activities in the financial statements. The updates affect five areas:
- Similar risk assessment for cash flow hedges
- Hedging interest payments on choose-your-rate debt
- Cash flow hedges of nonfinancial forecasted transactions
- Net written options as hedging instruments
- Foreign currency-denominated debt designated as a hedging instrument and a hedged item.
The new guidance will be effective for periods beginning after December 15, 2026 for all public business entities and one year later for other entities. The guidance is applied on a prospective basis, with transition provisions designed to assist in migrating existing hedging relationships to the new guidance.
Read our publication, FASB issues hedge accounting improvements, for further information.
- Government grants
In December, the FASB issued ASU 2025-10, Accounting for Government Grants Received by Business Entities, to establish guidance on the recognition, measurement, and presentation of government grants received by business entities. The new guidance leverages the principles in the accounting framework for government assistance in IFRS (specifically IAS 20, Accounting for Government Grants and Disclosure of Government Assistance), makes certain targeted improvements, and modifies certain existing disclosure requirements in ASC 832, Government Assistance.
The new guidance will be effective for periods beginning after December 15, 2028 for all public business entities and one year later for all other entities. The guidance can be applied on a modified prospective basis, a modified retrospective basis, or a full retrospective basis.
Read our publication, FASB issues guidance on accounting for government grants, for further information.
New guidance applicable for the first time in 2025 annual reporting
- Income tax disclosures
ASU 2023-09, Improvements to Income Tax Disclosures, becomes 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
Read our publication, FASB issues guidance on income tax disclosures (updated in October 2025), for further information.
Other hot topics
- AI-related transactions
AI continues to fuel some of the largest and most complex transactions this year, including acquisitions, strategic investments, and partnership structures that differ from traditional deals. We’re also seeing emerging financing models in which strategic investors may also be customers or suppliers as well as arrangements involving equipment financing, guarantees, or other support. These structures can blur economic boundaries and raise questions about commercial substance, related party implications, and in some cases, revenue recognition.
When thinking through the accounting for these transactions, finance teams should have a holistic view of all contract elements and their commercial substance, including an understanding of how the parties would operate independently of the arrangement. Check out our publication, Q4 Closing statements: Insights for controllers at quarter end, for additional accounting considerations related to these types of deals.
- Tariffs
As the tariff landscape continues to evolve, including new tariffs, changes in tariff rates, the potential elimination of certain tariffs, and legal challenges to some of the tariffs previously imposed, companies need to consider how and when to account for these and other possible changes. Our publication, Accounting implications of tariffs, was updated in December 2025 with information on assessing legal challenges and changes to tariffs.
- Disaggregation of income statement expenses
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE), which requires additional disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. As companies are preparing to adopt the DISE standard, which is effective for public business entities for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, questions on the implementation of the standard continue to arise. Accordingly, our publication, FASB issues new disaggregation expense disclosure requirements, was updated in November 2025 with additional insights.
- SAB 74 disclosures
As a reminder, when a new accounting standard has been issued but is not yet effective, public companies are required by SAB 74 to make disclosures about the expected impact of the new standard—even if the impact is still being evaluated. Companies need to comply with SAB 74 disclosure requirements in the year the ASU is issued, and the disclosures should be continuously updated each reporting period, evolving as the company’s analysis progresses and more information becomes available. Additional information on these disclosures is included in chapter 30 of the Financial statement presentation Guide. You can also check out our publication, Q4 Closing statements: Insights for controllers at quarter end, for reminders when preparing such disclosures.
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 the SEC and other regulatory agencies 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 September 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.
- Highlights from AICPA & CIMA Conference: SEC and PCAOB Developments
In December, representatives from the SEC, PCAOB, and FASB, along with various other speakers, participated in the 2025 AICPA & CIMA Conference on Current SEC and PCAOB Developments. Stakeholders discussed various accounting, financial reporting, auditing, and regulatory hot topics.
While the topics addressed over the 21 sessions ranged widely—from cryptocurrency and shareholder activism to segment reporting and accounting education—nearly all panels mentioned the growing impact of AI and the importance of understanding the associated risks while embracing its enormous potential. Another pervasive theme was how engagement among the stakeholders, both domestic and international, in the financial reporting ecosystem enhances its quality: preparers, audit committees, standard setters, auditors, investors, and regulators engage, or should engage, with each other amid shared objectives.
Read our publication, 2025 AICPA & CIMA Conference: SEC and PCAOB Developments, and listen to our podcast, Key takeaways from the AICPA & CIMA Conference, for further details on the conference.
- SEC Chair Atkins outlines priorities for disclosure reform
On December 2, SEC Chair Paul Atkins delivered a keynote address at the New York Stock Exchange, marking the upcoming 250th anniversary of the United States. In his remarks, Chair Atkins highlighted his priorities with respect to disclosure reform, noting that the SEC should root disclosures in what is material to investors, scaled considering the size and maturity of a public company. Chair Atkins suggested the SEC give “strong consideration” to revisiting the rules and thresholds that separate “large” and “small” companies, likely in reference to the current definitions of “large accelerated” and “accelerated” filers, as well as emerging growth companies (EGCs) and smaller reporting companies (SRCs).
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 Q4 2025
Financial reporting and accounting quarterly
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