Pwc's Cfodirect Podcast

Every Tuesday in July, Jay Seliber is taking over the podcast to share insights on business combinations, which are often significant events in a company’s life cycle. Jay takes us on a journey through a deal, beginning with the complexities of the overall acquisition accounting model, then diving into some of the more complex areas—identifying the accounting acquirer, accounting for contingent consideration, and reporting with the SEC.To continue the series, Heather and Jay are joined by Matt Sabatini to share insights on the identification of the accounting acquirer, a key judgment that impacts the remaining accounting conclusions in the acquisition model.In this episode, you’ll hear:1:46 - A discussion of the importance of determining the account acquirer as the starting point, and the downstream implications of that determination3:50 - An overview of the accounting framework from the acquirer’s perspective and the intersection with consolidation standards 6:18 - Insights on performing a control assessment

The International Sustainability Standards Board (ISSB) issued final IFRS® Sustainability Disclosure Standards on June 26, 2023. While IFRS Sustainability Disclosure Standards are not yet required in any jurisdiction, multiple jurisdictions around the world have already signaled their intent to adopt the new standards, with additional jurisdictions expected to do so now that the standards are final.What can companies find inside the new Sustainability Disclosure Standards? This week, Heather Horn was joined by Katie Woods, PwC UK director, to discuss the expected breadth of adoption internationally and the important considerations in advance of adoption.In this episode, you’ll hear discussion of:1:48 - The final IFRS Sustainability Disclosure Standards: IFRS S1 and IFRS S27:06 - The current status of adoption of the Sustainability Disclosure Standards in international territories11:43 - The interconnectivity between IFRS Sustainability Disclosure Standards and IFRS Accounting Standards19:12 - Key changes betw

Every Tuesday in July, Jay Seliber is taking over the podcast to share insights on business combinations, which are often significant events in a company’s life cycle. Jay takes us on a journey through a deal, beginning with the complexities of the overall acquisition accounting model, then diving into some of the more complex areas— identifying the accounting acquirer, accounting for contingent consideration, and reporting with the SEC. To kick off the series, Jay shares insights on the foundations of acquisition accounting, including key areas of judgment in the model.In this episode, you’ll hear discussion of:1:58 - The importance of understanding acquisition accounting, even in times of low deal volume3:50 - The foundational accounting considerations for business combinations, including the determination of which transactions qualify as business combinations, and the implications on the control assessment8:04 - The acquisition method, including how to account for the various forms of consideration exchang

The European Union’s (EU’s) Foreign Subsidies Regulation (FSR) was enacted to extend existing EU state aid rules, which govern the fairness of trade among states within the EU, to subsidies received from jurisdictions outside the EU, and includes incentives such as those provided by the US Inflation Reduction Act (IRA).What are the parameters of the new regulation, and how could it impact the realizability of climate incentives for your company? Heather Horn was joined by Barry Murphy and Allard Knook, PwC partners, to unpack these questions and provide the latest insights on the FSR, as well as available EU tax incentives.In this episode, you’ll hear discussion of:2:38 - How the US IRA has shaped global regulatory agendas for state aid8:13 - How the EU is providing its own incentives currently17:14 - An overview of the Green Deal Industrial Plan24:02 - The FSR rules, and their potential impact to non-EU companies36:33 - The underlying policy objectives of the FSR, and how the FSR complements EU climate incen

The International Sustainability Standards Board (ISSB) issued final IFRS® Sustainability Disclosure Standards on June 26. This included IFRS S1, which provides the core framework for the disclosure of material information about sustainability-related risks and opportunities across an entity’s value chain, and IFRS S2, which is the first thematic standard issued that sets out requirements for entities to disclose information about climate-related risks and opportunities.What’s ahead for sustainability reporting globally now that these standards are final? This week, Heather Horn was joined by Sue Lloyd, Vice-Chair of the ISSB, to discuss the complex process of finalizing its global baseline standards, the forthcoming impact to companies, and the expected breadth of adoption internationally.In this episode, you’ll hear discussion of:1:26 - How the ISSB brought the standards to the finish line, including the biggest obstacles along the way10:12 - Noteworthy changes from the initial draft standards to the final

Every Tuesday in June, Angela Fergason is taking over the podcast to share the latest in her areas of specialty — including recent trends in revenue, how to consider whether your company is a principal or agent when recognizing revenue, software costs, and restructurings.To continue the series, Angela shares insights on some accounting implications of workforce restructuring, including the different accounting models available for termination benefits.In this episode, you’ll hear:1:08 - An overview of the various accounting models applicable to workforce restructuring eventsInsights on accounting for:3:55 - One-time involuntary benefits, including severance payments8:54 - Termination benefits under an existing plan14:50 - Voluntary termination benefits and other benefit combinations 20:03 - Modifications of stock-based compensation awards, including both vested and unvested awards28:36 - Extending the exercise period of stock-based compensation awards31:14 - Final advice on accounting for workforce restructur

PwC recently conducted research based on our most recent Global CEO Survey and Global Investor Survey to understand a key question: how much alignment is there between company leadership and the expectations of investors on ESG issues? The results were insightful, and might even surprise you. This week, Heather Horn was joined by Nadja Picard, PwC Global Reporting Leader, to break down the results and discuss the differing expectations between CEOs and investors. They also address how CFOs and their teams can help companies better meet investor expectations on sustainability.In this episode, you’ll hear discussion of:1:36 - The research: What the data from the Global Investor Survey and CEO Survey says15:14 - Where there may be gaps in what investors are expecting, and the importance of creating a strategy to progress in closing the gaps22:08 - How companies are embedding sustainability reporting in their processes and systems      32:30 - How CFOs and their organizations are leading in communicating progress

We begin this edition of The quarter close with a closer look at the accounting for tax credits, including those included in the Inflation Reduction Act of 2022, as more companies look for opportunities to take advantage of these incentives. Looking for an update on SEC comment letter trends? Head to Ask the National Office, where we provide the latest areas of focus along with other timely financial reporting reminders.Although the SEC has not yet released its final rules on climate disclosures, many US companies will be impacted by global sustainability reporting frameworks that are nearing finalization. We provide the latest updates and links to additional resources. In other regulatory developments, the SEC issued final rules expanding the disclosure requirements for share repurchases, which will be effective in 2023 for many registrants.In standard-setting updates, we summarize the feedback on new income tax disclosures proposed by the FASB. Meanwhile, the FASB continues to make progress on its other act

Every Tuesday in June, Angela Fergason is taking over the podcast to share the latest in her areas of specialty — including recent trends in revenue, how to consider whether your company is a principal or agent when recognizing revenue, software costs, and restructurings.To continue the series, Heather Horn and Angela are joined by Mike Coleman to share insights on accounting for software costs and provide an update on the FASB’s project on software costs.In this episode, you’ll hear:1:38 - Considerations when accounting for software costs across industries, including the impact of digital transformations and the possible impact of new FASB standards in progress6:17 - An overview of current guidance, including the two accounting models for software (externally marketed software and internal use software)10:13 - Accounting considerations from the perspective of the software vendor14:51 - Accounting considerations from the perspective of the software buyer17:03 - An update on the FASB’s project to modernize acc

The European Commission has adopted a set of proposals, known as the European Green Deal, including the Corporate Sustainability Reporting Directive (CSRD), which marks a new era of sustainability reporting in the EU. Under the CSRD, companies will soon have to report on a wide range of environmental, social and governance matters in compliance with European Sustainability Reporting Standards (ESRS).This week, the European Commission released revised ESRS for public feedback. For this episode, Heather Horn was joined by Andreas Ohl, a PwC National Office Partner and Global sustainability topic team leader and Emily Kirsch, a PwC National Office Director who is following sustainability-related projects from accounting standard setters in the EU, to share their insights. Feedback is due July 7th, 2023.In this episode, you’ll hear:1:48 - An overview of the revised European Sustainability Reporting Standards7:52 - The biggest takeaways - including the changes in the proposed standards from earlier drafts12:40 - C

Every Tuesday in June, Angela Fergason is taking over the podcast to share the latest in her areas of specialty — including recent trends in revenue, how to consider whether your company is a principal or agent when recognizing revenue, software costs, and restructurings.To continue the series, Heather and Angela are joined by Mike Coleman, a partner in PwC’s National Office, to share insights on the challenges in the principal versus agent analysis.In this episode, you’ll hear discussion of:1:37 - An overview of the principal versus agent assessment3:52 - Practical examples7:09 - An overview of the two-step assessment of whether the company acts as the principal or agent from the perspective of the intermediary17:22 - An overview of the two-step assessment of whether the company acts as the principal or agent from the perspective of the vendor18:22 - Considerations when accounting for revenue based on the results of the principal versus agent analysis22:35 - Final advice to clients and engagements teams when

With so much focus on upcoming mandatory sustainability reporting requirements from jurisdictions around the globe, it’s sometimes easy to lose sight of the fact that many of the biggest sustainability-related topics often can and do have an impact not just on sustainability disclosures, but also on the financial statements. Both the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB)® have provided educational materials on the topic of ESG in the financial statements under existing accounting standards – and both boards have added projects to their respective agendas that will impact accounting standards in the future.This week, Heather Horn was joined by Scott Bandura, Valerie Wieman, and Katie Woods, who are all following sustainability-related projects from accounting standard setters, to share their insights on these projects and provide reminders under current accounting standards for reporting on ESG topics in the financial statements. Katie also addresse

Every Tuesday in June, Angela Fergason is taking over the podcast to share the latest in her areas of specialty — including recent trends in revenue, how to consider whether your company is a principal or agent when recognizing revenue, software costs, and restructurings.To kick off the series, Angela shares insights on current trends in the accounting for revenue transactions.In this episode, you’ll hear discussion of:1:38 - An overview of accounting for revenue4:16 - “Everything as a Service” (XaaS) arrangements and their embedded complexities, including interaction with the lease accounting model12:38 - Revenue contract modifications, including scope reductions17:32 - The non-cash consideration revenue model, including equity payments for both vendors and customers as well as interaction with stock-based compensation guidance23:04 - Considerations when revenue arrangements include significant financing26:05 - SEC comment letter trends and final advice on accounting for revenueFor more information, read our

The European Commission has adopted a set of proposals, known as the European Green deal, with the aim of reducing net greenhouse gas emissions in the European Union (EU) by at least 55% by 2030, and achieving zero net emissions by 2050. In addition to the Corporate Sustainability Reporting Directive (CSRD), another pillar of this policy is the creation of the Carbon Border Adjustment Mechanism (CBAM), a new border tax aimed at equalizing the price of carbon paid for EU products operating under the EU Emissions Trading System (ETS) with that of similar imported goods.CBAM is likely to impact the cost of carbon in global supply chains, and also has reporting obligations beginning as early as October of 2023, and the regulation has raised many questions. Which companies will it impact? What products are in scope? Will it impact companies that don’t do business in the EU?This week, Heather Horn was joined by Barry Murphy and Niels Muller, PwC partners who are following CBAM, to share their insights on what it me

Every Tuesday in May, Jennifer Spang is taking over the podcast to share the latest on income tax accounting — recent global and US tax policy developments, standard setting activity, and tax accounting considerations related to common transactions, such as business combinations and spinoffs.To continue the series, Heather and Jenn are joined by Matt McCann, a partner in PwC’s National Office, to share insights on the practical challenges that arise in the tax accounting for spinoff transactions.In this episode, you’ll hear discussion of:1:30 - What a spinoff transaction is and the SEC filing requirements, including the preparation of carve-out financial statements7:48 - Considerations related to allocating the consolidated income tax provision to the carved-out entity 18:22 - Other practical tax challenges in carve outs including valuation allowance assessments, uncertain tax positions, and tax sharing agreements 28:30 - The importance of robust disclosures when attributes or assertions are expected to chang

With so much focus on the SEC’s climate disclosure proposal in the US this year, climate has taken the attention of many preparers – and for good reason. However, another topic, natural resources and biodiversity, is coming to the forefront as governments and companies begin to understand the size of the problem, both in terms of its potential impact on business and the potential impact of business on biodiversity. But with many competing priorities, how do companies also contemplate nature issues in their strategy?This week, Heather Horn was joined by guests at the forefront of the nature space:Will Evison, director in PwC UK’s Global Sustainability, Climate, and Nature Strategy practiceEva Zabey, CEO of Business for NatureJulie Moorad, Senior Manager of Climate Action at SalesforceOur panel shares their insights on ways companies are strategizing and integrating the topic of nature into their operating models.In this episode, you’ll hear discussion of:1:42 - Synergies between climate initiatives and nature

Every Tuesday in May, Jennifer Spang is taking over the podcast to share the latest on income tax accounting — recent global and US tax policy developments, standard setting activity, and tax accounting considerations related to common transactions, such as business combinations and spin-offs.To continue the series, Heather and Jenn are joined by Kassie Bauman, a managing director in PwC’s National Office, to share their insights on income tax accounting for business combinations.In this episode, you’ll hear discussion of:2:01 - An overview of the applicable guidance and a summary of steps to take when assessing tax considerations of a business combination7:13 - The importance of the tax status of the entities involved and distinguishing between taxable and non-taxable transactions 20:53 - Identifying and measuring temporary tax differences related to business combinations23:36 - Deferred taxes associated with goodwill and considerations on the valuation allowance assessment34:26 - Other common tax accounting

The International Sustainability Standards Board (ISSB) has been working quickly through deliberations on its proposals to create a comprehensive global baseline of sustainability disclosures. Final standards are expected by the end of Q2 2023. But implementing an effective global baseline goes beyond simply setting standards – it requires a new set of capabilities, infrastructure, knowledge, and talent in economies around the world.How will this be accomplished? This week, Heather Horn was joined by Jingdong Hua, Vice Chair of the ISSB, and Mardi McBrien, Strategic Affairs Director of the IFRS Foundation, to discuss the topic of “capacity building” and how the IFRS Foundation is focused on bringing the global reporting community along the sustainability reporting journey.In this episode, you’ll hear discussion of:2:29 - What capacity building means4:59 - How the ISSB is creating partnerships to advance its progress toward building capacity12:35 - The importance of interoperability across jurisdictions and re

Every Tuesday in May, Jennifer Spang is taking over the podcast to share the latest on income tax accounting — recent global and US tax policy developments, standard setting activity, and tax accounting considerations related to common transactions, such as business combinations and spin-offs.To continue the series, Heather and Jenn are joined by Kassie Bauman, managing director in PwC’s National Office, to share insights on income tax accounting for equity method investments.In this episode, you’ll hear discussion of:1:31 - An overview of the equity method of accounting under GAAP for book purposes6:21 - Book versus tax basis differences and when to record deferred taxes on equity method investments8:52 - Income tax accounting implications when an investee becomes a subsidiary (or vice versa) through changes in ownership and control13:43 - Income tax considerations related to equity method investments in partnerships, including the “look-through” policy election and inside and outside tax basis differences25

With a multitude of ESG disclosure and reporting requirements coming into play around the world, it’s easy to begin viewing sustainability as nothing more than a compliance and reporting obligation – something that must be done but that doesn’t actually create value.But what if that perspective is limited? This week, Heather Horn was joined by Jamie Gamble, PwC managing director, to discuss how leading companies and their boards are viewing sustainability as an opportunity to reflect on the issues that are core to their businesses’ value creation – and integrating these issues into their strategies to create sustainable, long-term value. This is what Jamie calls “sustainable value governance.”In this episode, you’ll hear discussion of:3:20 - The marketplace factors driving demand for sustainable progress6:30 - How investors and other stakeholders are beginning to understand the long term value embedded in ESG issues14:54 - A four-part framework for sustainable value governance28:20 - How robust reporting for