2018年-普华永道全球_TMT_sector_game_changers_PwC_9页_711kb

TMT Sector Game Changers Summary

Core Content

This report, published in June 2018, provides an in-depth analysis of emerging accounting and reporting trends specifically impacting the Technology, Media, and Telecommunications (TMT) sector. It aims to help business leaders stay informed and strategically prepared for changes in the market.

Main Trends and Insights

M&A and Capital Market Activity

• The TMT sector remains active in M&A despite uncertainties related to tax reform and regulatory issues.
• Deal Volume and Value: In Q1 2018, the Technology segment saw four deals over $5 billion and over 500 transactions. The largest deal was General Dynamics' acquisition of CSRA for $9.6 billion.
• Media and Telecommunications: 244 deals were recorded in Q1 2018, the highest level in two years. Blackstone Group LP acquired a 55% stake in Thomson Reuters' Financial & Risk business for $17.0 billion.
• IPOs and Debt Offerings: $6.1 billion was raised through 7 IPOs since January 2018, with Dropbox's public filing raising $756 million. Debt issuance totaled $65.5 billion to support refinancings and acquisitions.
• Venture Capital: $21.1 billion was deployed to US VC-backed companies in Q1 2018, with a 4% increase in dollar terms and a 2% decrease in the number of deals compared to Q4 2017.
• AI Funding: Q1 2018 was a record quarter for AI funding, with over $1.9 billion invested, including three AI mega-rounds.

New Lease Accounting Rules

• The new lease accounting standard is set to take effect, with PwC offering insights through the In the loop series and In depth publications.
• Key Topics: The report includes information on variable lease payments, discount rates, and the impact on lease liabilities.
• Video Resources: Available on CFOdirect.com for further guidance.

Revenue Recognition Standard (ASC 606)

• Most public companies have adopted the new revenue standard, and are now focusing on "Day 2" strategies.
• Adoption Method: 24% of TMT companies used a full retrospective method, while 76% used a modified retrospective method.
• Disclosures: 63% of companies disclosed the quantitative impact of the new revenue standard in their SAB 74 disclosures. Only 14% disclosed material changes in internal controls related to the new standard.
• Capitalization of Costs: Companies that capitalize costs to obtain a contract are advised to classify them as ST/LT based on the contract term.

Tax Reform Impact

• Under SAB 118, companies can account for the impacts of tax reform on a provisional basis.
• Stranded Tax Effects: The FASB issued ASU 2018-02, allowing companies to reclassify stranded tax effects from AOCI to retained earnings. This guidance includes required disclosures and is effective for fiscal years beginning after December 15, 2018.
• Non-GAAP Measures: Companies should consistently adjust non-GAAP measures for tax reform impacts and not selectively choose which items to include.

Cloud Computing Implementation Costs

• The EITF concluded that implementation costs for cloud computing arrangements should be evaluated for capitalization using the same model as software licenses.
• Presentation and Classification: Capitalized implementation costs should be presented in the same line item as prepayment fees and expensed as operating expenses, not depreciation or amortization.
• Disclosures: Minimal new disclosures are required, focusing on the nature of the hosting arrangement, capitalized amounts, and significant judgments.

Cybersecurity Disclosures

• The SEC issued interpretive guidance in February 2018 on cybersecurity risk and incident disclosures, emphasizing the need for strong disclosure controls and procedures.
• Global Cybersecurity Trends: Over 9,500 global executives responded to a survey, highlighting the importance of improving cyber and privacy risk management.
• GDPR Impact: The EU's GDPR has become a critical compliance issue, especially for TMT companies. Non-compliance risks include potential fines exceeding $9 billion.

GDPR Compliance and Operational Readiness

• GDPR, effective May 25, 2018, has become a new regulatory baseline for European operations.
• Compliance Challenges: Many organizations are still in the process of achieving initial compliance, and fewer have established sustainable operational procedures.
• Technology Enablement: Companies are increasingly using automation and GRC tools to streamline GDPR operations.
• Resourcing Strategies: Some firms are outsourcing DPO roles and using co-source or staff augmentation to manage GDPR-related tasks.

Key Information

• M&A Activity: Continued despite regulatory and tax uncertainties, with a focus on premium content and technology enhancements.
• Capital Markets: Active IPOs and debt offerings support TMT growth and expansion.
• Lease Accounting: New rules are approaching, with PwC providing guidance on variable payments and discount rates.
• Revenue Recognition: Most companies have adopted ASC 606, with varying degrees of system changes and disclosures.
• Tax Reform: Companies are accounting for tax impacts on a provisional basis, with required disclosures on stranded tax effects.
• Cloud Computing: Implementation costs should be capitalized and expensed over the hosting term.
• Cybersecurity: SEC guidance emphasizes the importance of disclosure controls and procedures.
• GDPR Compliance: A critical ongoing requirement, with companies needing to maintain operational readiness and adapt to evolving regulations.

Additional Resources

• PwC Reports: Access detailed insights on M&A, revenue standards, tax reform, and GDPR through PwC's website and publications.
• Contact Information:
  • Mark McCaffrey (US TMT Industry Leader): mark.mccaffrey@pwc.com
  • Kevin Healy (US TMT Assurance Leader): kevin.healy@pwc.com
• Contributors: Angela Fergason, Courtney Blum, Steve Lunceford, Joseph Niedringhaus, Melinda Tom, Sachi Patel, and Toby Spry.