Earnouts and other forms of contingent consideration provisions are becoming more common, which adds a level of accounting complexity. To shed light on the fundamentals, PwC partners Andreas Ohl and Chris Rhodes join Heather Horn to discuss the different types of structures and the related accounting considerations from the perspective of both the buyer and seller. 

Topics include:

• 0:46 - The motivations behind earnouts. Before getting into the accounting, we begin by discussing some of the typical motivations for these provisions. 
• 6:28 - Deal structure. Andreas and Chris share common financial and non-financial deal structures stressing the importance of clearly defined terms.
• 9:18 - Buyer considerations. There are various considerations that a buyer needs to consider in their accounting. Andreas walks through the guidance.
• 17:49 - Seller considerations. What does the seller need to consider? We explain.

Andreas Ohl is a partner in PwC's National office focused on mergers and acquisitions under US GAAP and IFRS. Andreas is chairman of the Business Valuation Standards Board at the International Valuation Standards Council, is a member of the working group that authored the AICPA's In-Process R&D guide, and has served as a member of the FASB's Valuation Resource Group.

Chris Rhodes is a partner in PwC's Transaction Services practice. He provides commercial structuring, valuation, and accounting advice for a variety of transactions under both US GAAP and IFRS. His focus includes strategic transactions, such as acquisitions, divestitures, and joint ventures, along with capital raising and capital restructuring. Chris has advised companies across a variety of industries, but concentrates on non-financial services companies.

Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].

Technology continues to reshape our world and has been accelerated by the pandemic. As you rethink processes for the new environment, you may be asking how technology can help improve efficiency and effectiveness. This podcast is the next episode in the second season of our What’s next? podcast series for CFOs, controllers—anyone in finance. This season we’re focusing on what’s next in tech for the finance professional—discussing the benefits of technology through the lens of the finance function. In this episode, host Heather Horn sits down with Michael Shehab and Michael Baccala, leaders in PwC’s innovation lab, to discuss the significant role that data analytics skills and technologies have on taking businesses to the next level in the decision-making process.

Topics include:

0:53 - We cannot operate without data: Data has always been important, but now more than ever we’re being asked to make decisions in high-stress,  high-change environments, making the need for data-driven decisions the key to unlocking true digital transformation.
6:28 - The data maturity curve: Understanding your data means understanding your business. We discuss the four categories of analytics:
                      7:10 - Descriptive data
                      8:13 - Diagnostic data
                     15:13 - Predictive analytics
                     16:14 - Prescriptive analytics
19:33 - Think outside the spreadsheet: We discuss the three things that companies and individuals can do to step up their data analytics, starting now.
24:44 - Growing pains: Trying new things can be difficult, but the good news is that you don’t need to be a data scientist to get to the next level. We discuss ways individuals can challenge themselves to experiment with new tools and upskill.   
29:30 - What’s exciting about the future?: Data-driven decisions made today will impact market resiliency in the future. We close by reinforcing the opportunities and technologies available to learn how to work with data.

Michael Shehab is the leader of PwC Labs and Tax Technology. As part of Michael’s role, he is responsible for leading the firm’s strategy to digitally upskill our people and help our clients redesign and redefine business processes. Michael has spent 23 years listening to clients’ needs and transforming the industry.

Mike Baccala is a PwC Principal with over 27 years of deep audit and technology consulting experience providing Fortune 500 companies with emerging technology, implementing enterprise systems, data analytics, financial audit support, internal controls over financial reporting, internal audit and business transformation program management.

Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].

There’s a lot of uncertainty these days that can cause volatility in foreign exchange rates. In this episode, PwC managing director John Horan joins host Heather Horn to take a look at how to manage foreign currency risk and how to apply the basics of foreign currency hedge accounting. 

Topics include:

• 0:50 - What’s going on with currencies? We begin by talking about what’s behind the current currency volatility, and the importance of  having a comprehensive plan for currency risk management. 
• 6:58 - The types of currency exposure. There are a variety of ways foreign currency volatility may impact the financial statements. Here we discuss the types of currency exposures that companies are concerned with.
• 8:58 - Transaction exposures. A company has transaction exposure when monetary assets or liabilities are recorded in currencies other than their functional currency. Although many companies hedge these risks, most do not apply hedge accounting. 
• 17:49 - Economic exposures. An economic exposure occurs when a company expects to purchase goods or sell products in a currency other than its functional currency. The company is economically exposed to changes in exchange rates, even though the future purchases or sales are not yet recognized in its financial statements.  
• 28:39 - FASB FAQ. The FASB released guidance related to cash flow hedging and the pandemic. John provides an overview.
• 31:51 - Translation exposures. Although most companies do not try to hedge this exposure, it is a concern. This exposure manifests itself through changes in reported earnings, as the US Dollar strengthens or weakens versus other currencies around the world.

John Horan is a managing director in PwC’s National office where he assists clients with complex accounting issues in the areas of foreign currency, liabilities and equity, earnings per share, and derivatives and hedging. John specializes in large capital transactions and initial public offerings.

Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].

Technology continues to reshape our world and has been accelerated by the pandemic. As you rethink processes for the new environment, you may be asking how technology can help improve efficiency and effectiveness. This podcast is the next episode in the second season of our What’s next? podcast series for CFOs, controllers—anyone in finance. This season we’re focusing on what’s next in tech for the finance professional—discussing the benefits of technology through the lens of the finance function. In this episode, host Heather Horn sits down with Bob Woods, a PwC partner, to discuss how the agile methodology is modernizing the finance function. 

Topics include:

• 0:55 - Short-term outcomes to reach  long-term visions. The pandemic has put into focus the question of how work gets done. We begin by discussing what the agile methodology is and the advantages driving its widespread adoption. 
• 5:45 - Key areas of focus for finance. We discuss the ways teams can use agile sprints within the walls of the finance function, including: planning and forecasting, transaction processes, and compliance.
• 18:43 - Implementation and embracing change. Bob shares the best ways to drive adoption,  including taking a peer-driven approach and the importance of the “tone at the top.” 
• 29:30 - What’s exciting about the future? Disruption can be unpredictable, but readiness doesn’t have to be. We close by talking about the opportunities available to learn, listen and act in order to become more agile in your work day.

Bob Woods is a PwC partner providing consulting services to executives for public and private companies in the high-tech, software, cloud and internet industries. His experience includes business and digital transformation initiatives for the finance function including changing to digital, SaaS, or cloud-based models. Bob also led PwC's finance modernization solution and thought leadership efforts in the US.

Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].

With companies increasing their expenditures on technology, including software and related services, questions about how to account for these costs are becoming more common. To help navigate the accounting and reporting guidance in this area, PwC partners Mike Coleman and Angela Fergason join Heather Horn to discuss what you need to know about accounting for software costs. 

Topics include:

• 0:47 -Determine the appropriate accounting model. When companies incur costs on new software—either developed for internal or external use or purchasing it from a vendor—sometimes the most challenging part is navigating which accounting model to apply. Mike and Angela share similarities across three primary models and highlight important reporting differences. Summarizing each model, we address:
  • 3:01 - Externally-marketed software
  • 9:51 - Internal-use software 
  • 16:03 - Cloud computing (service) costs
• 20:31 - Final reminders. We close by going through a few other types of expenses with accounting impacted by which model is used, and re-emphasizing the reporting differences. 

Michael Coleman is a partner in PwC's National Office with over 30 years of experience specializing in accounting for revenue and software arrangements. In addition, Mike has been one of the firm's representatives on the AICPA Software Task Force. Prior to his time in National, Mike was an audit partner in the firm's NY Metro assurance practice serving technology clients.  

Angela Fergason is a partner in PwC's National Office with over 20 years of experience who specializes in accounting for revenue and employee compensation arrangements. She is  a frequent speaker on accounting and financial reporting topics and is a contributor to many PwC National Office publications, including our accounting guides on revenue and stock-based compensation.

 Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].

Technology continues to reshape our world and has been accelerated by the pandemic. As you rethink processes for the new environment, you may be asking how technology can help improve efficiency and effectiveness. This podcast is the second episode in the second season of our What’s next? podcast series for CFOs, controllers—anyone in finance. This season we’re focusing on what’s next in tech for the finance professional - discussing the benefits of technology through the lens of the finance function. In this episode, host Heather Horn sits down with Paul Sheward, a partner on PwC’s innovation leadership team, to discuss citizen-led innovation. 

Topics include:

• 0:48 - What is citizen-led innovation? Citizen-led innovation is about adapting to a changing environment to rethink what you do and how you do it. We begin by talking about the importance of empowering workers to upskill. 
• 5:03 - Where to start? You don’t need to come from a technology background to understand and apply new technologies. Paul advises to start small, prove the concept, and then expand it within the organization. 
• 10:51 - What are the key areas of citizen-led innovation? There are three key legs of the citizen-innovation stool: data analysis, automation, and visualization. We explore the areas most ripe for innovation within the finance function.
• 20:52 - What if you hit a barrier? Employees may be resistant to innovation and technological change, especially if they think it will eliminate their position. Paul discusses some of the common challenges he’s seen and shares best practices for making a culture of innovation stick.  
• 30:50 - What’s exciting about the future? Fueled by the ability to adapt quickly, Paul lets us know that the future of citizen-led innovation is bright. 

Paul Sheward is a member of PwC’s assurance innovation leadership team with primary responsibility for leading citizen-innovation activities for the assurance practice. Paul is responsible for the development and implementation of a strategy to ensure that PwC’s assurance professionals develop and apply advanced digital acumen in delivering services to our clients.

Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].

In this episode, we go back to basics to talk about discontinued operations. It’s an area that’s recently seen an increase in questions, so we’re taking a closer look at when discontinued operations accounting applies and how it may impact financial statement users. 

Topics include:

• 0:37: Discontinued operations—overview. We start with an overview of the purpose of discontinued operations presentation and why it’s meaningful to users of the financial statements.
• 3:10: Held-for-sale—overview. The held-for-sale impairment model is critical to assessing discontinued operations. We highlight how a component would meet the held-for-sale criteria as of the balance sheet date, and then look at the financial reporting implications.
• 0:00: Held-for-sale—FAQs. We examine the most common questions we hear when preparers are working through evaluating the criteria for held-for-sale.
• 0:00: Discontinued operations—the  criteria. How does the held-for-sale model interact with the discontinued operations model? We explain.
• 0:00: Discontinued operations—  presentation and disclosure. We close by talking through the impacts to the financial statements, as well as share final reminders and where listeners can find more information.

Beth Paul is a partner and topical team leader in PwC’s National office. In this role, Beth is responsible for a team of consultants that specialize in business combinations and related areas such as consolidations, disposals, impairments, and segment reporting. Prior to this role, Beth was the Strategic Thought Leader in PwC’s National office working closely with firm leadership to determine PwC’s position on emerging trends in auditing, accounting, and financial reporting matters.

Steve Dolph is a director in PwC’s National office, specializing in accounting for business combinations and related areas, including asset acquisitions, disposals, and impairments. Prior to joining the National Office, Steve had more than 10 years of experience as a member of PwC's Private Company Services group, focusing on private company accounting issues and business solutions.

Heather Horn  is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].

Technology continues to reshape our world and has been accelerated by the pandemic. As you rethink processes for the new environment, you may be asking how technology can help improve efficiency and effectiveness. This podcast is the first episode in the second season of our series for CFOs, controllers—anyone in finance—wondering: what’s next in finance? This season we’re focusing on the benefits of technology through the lens of the finance function. In this episode, host Heather Horn sits down with Pierre Sur, PwC’s US Tech Enabled Audit leader, to discuss the importance of technology in the future of business. 

Topics include:

• 1:31 - Tech trends. We begin by discussing the factors that are affecting the speed of innovation, such as market factors, workforce transitions, and the need to provide a remote and seamless operation to connect clients, customers, and employees. 
• 6:46 - Facing change. We discuss the importance of having a change management plan when embarking on a finance transformation that weighs the benefits and drawbacks and has flexibility to adapt to the intended user.  
• 9:57 - The current and future of technology. Pierre lays out the set of core technologies that companies currently utilize for data analysis, automation and storytelling...and adds why AI is an overused acronym. 
• 23:56 - Beyond a CPA. What does the finance professional of the future look like? Pierre shares the importance of developing digital skills and going beyond what he calls “domain expertise.”
• 27:14 - What’s exciting about the future? Heather and Pierre close by talking about the opportunities to stay relevant and successful. 

Pierre Sur is a PwC partner. As a member of the US Assurance Leadership Team, he oversaw all of PwC's Assurance practice innovation and disruption activities. He also specializes in delivering superior service to communications and technology companies, enabling them to reach their financial and organizational goals. 

Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].

The OECD is an organization of member countries that set the framework for global policies in a number of areas. Recently, they have focused on developing guidance for equitable allocation of profits and what an appropriate minimum measure of taxation is for multinational companies. How will this affect a company's global business operations, and what does this mean for preparers of the financial statements? Let us fill you in. 

Topics include:

• 0:50 - Overview. Before getting into the details, we cover the basics: the role of the OECD and how the organization works.
• 5:18 - Recent activity. We walk us through the specifics as we examine the two tax objectives: equitable allocation of profits and a worldwide minimum effective tax rate. 
• 19:49 - Use of financial statement. Both objectives propose to utilize financial statements for a tax base. We discuss the challenges with this approach.
• 26:08 - Adjustments to financial reporting. What adjustments to the financial statements might be required? We touch on a few of the areas that would need to be considered.  
• 34:31 - What’s next? There are still many questions for the OECD to work through. We close by talking through the next steps.

Jennifer Spang is a tax partner in PwC's National Office specializing in tax accounting under US GAAP and IFRS. She has over 25 years of experience helping companies in a variety of industries navigate complex tax accounting matters. 

Pat Brown is the PwC Washington National Tax Services co-leader. Prior to joining PwC, he spent 16 years in the private sector, including a role as the director of tax policy for a Fortune 50 company. Pat has also served in the US Treasury’s Office of Tax Policy as an attorney-advisor and as Associate International Tax Counsel.  

Heather Horn  is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].

Amid the excitement of getting back to a semblance of business as usual, you’re probably asking yourself a lot of questions—as in, what is the new normal and where do I go from here? This podcast is the last episode in our series for CFOs, controllers—really, anyone in finance—asking big questions, like: how do we emerge from a crisis stronger than before? Over our 16 episodes, we’ve focused on the areas that may need your focus in this period of recovery. 

In this episode, host Heather Horn sits down with Neil Dhar, PwC Vice Chairman and Chief Clients Officer.

Topics include:

• 0:42 - Where are we now? We begin by looking at the results of PwC’s Road to Election 2020 Survey, which tracks C-suite sentiment on the top policy issues at play and their business impact on  companies as they move beyond crisis management toward a return to growth. 
• 6:05 - Scenario planning. How to make decisions in uncertain times? Scenario plan. We discuss how management teams are rebuilding revenue streams and how tax considerations may affect the ability to make investments. 
• 8:56 - Digital transformation. Neil shares the ways companies are looking to deliver more value, at a lower cost, in a tech-enabled way.
• 12:31 - Risk management. Neil highlights the importance companies are placing on evolving their processes and controls to operate in the new world with increasing threats from such areas as cybersecurity because of the work-from-home environment.
• 13:26 - M&A activity. How has the M&A market changed over the past 8 months and how will the election impact transaction activity? Neil explains.
• 17:31 - Transparent reporting. As companies work toward greater transparency, Neil shares what he’s hearing from management teams on ESG and D&I initiatives.
• 20:04 - Going forward. From reopenings to investments in the future workforce, we close by talking about what makes Neil optimistic for 2021. 

Neil Dhar serves as Vice Chairman - Clients, Markets and Sectors (Chief Clients Officer) at PwC. In this role, he serves as the firm's leading client advisor helping harness the firm's vast capabilities across the consulting, M&A, tax, and assurance segments to solve complex issues across the firm's extensive client base. He has overall responsibility for PwC’s markets & sectors and serves on the firm's management committee. Neil is a frequent guest on major news outlets (CNBC, Bloomberg, Fox Business News, Wall St Journal, Business Insider, Forbes, etc), lecturer at financial conferences and the author of numerous articles on transformational events.

Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].