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Technology Industry Accounting Guide

Technology industry accounting and reporting insights

The evolution of the technology industry has introduced a variety of complex challenges for accounting and financial reporting professionals. Deloitte’s Technology Industry Accounting Guide can help accounting and reporting teams navigate the most pressing issues they face.

Technology Industry Accounting Guide

Technology industry accounting: Guidance for the latest accounting and reporting issues

The technology industry continues to rapidly evolve and has experienced convergence with other types of businesses, creating subsectors like fintech, health tech, and auto tech to name a few. Significant growth along with the continuous innovation by technology entities introduces complex issues for accounting and financial reporting professionals. These teams must exercise significant judgment in applying existing rules to matters such as revenue recognition, contract costs, software-related costs, stock-based compensation, financial instruments, IPO, disclosures of non-GAAP financial measures and metrics, and more.

With interpretive guidance, illustrative examples, and recent standard-setting developments, the inaugural edition of Deloitte’s Technology Industry Accounting Guide is designed to help accounting and financial reporting teams in the technology industry navigate these complex challenges, among others. This guide is the perfect companion for technology industry accounting professionals encountering new industry trends and can be applied in any variety of organizational categories, from enterprise software and software-as-a-service (SaaS) providers to hardware and semiconductor manufacturers, and everything in between.

What’s in the Tech Industry Accounting Guide? An Introduction video

Technology Industry Accounting Guide

Download the full Technology Industry Accounting Guide or explore the highlights and downloads for individual sections below.

Industry outlook

The current environment continues to present unique tech-related accounting challenges.

Revenue recognition

Accounting teams in the technology industry should understand the accounting consequences for complex revenue arrangements.

Contract costs

Revenue contract costs, particularly commissions, are often significant for technology entities.

Software and software-related costs

As technology evolves, entities typically incur myriad costs related to software.

Acquisitions and divestitures

Those in the technology industry frequently engage in M&A or divestiture activity and with varying outcomes possible, interpreting the accounting guidance is vital.

Consolidation

Technology entities frequently enter into a variety of arrangements with other parties to facilitate advancements of their IP or products and must carefully analyze those arrangements for consolidation.

Inventory

Navigating the inventory accounting guidance is key for many technology entities, particularly those that sell hardware and components.

Stock-based compensation

As many technology entities grant stock-based compensation awards, it’s important to understand the complexities.

Leases

One of the most significant challenges technology entities encounter in applying the leasing standard is to determine which arrangements contain leases.

Financial instruments

External financing transactions often include complex terms and conditions that require a careful accounting analysis.

Income taxes

The accounting for income taxes under ASC 740 that are most relevant to the technology industry is sometimes very specific and can be challenging to apply.

Contingencies and loss recoveries

Contingencies often arise in the technology industry as entities face increased risks associated with lawsuits and compliance with various regulatory requirements.

Digital assets

Investing in or otherwise being in the business of selling or using digital assets may present technology entities with a host of opportunities but also unique accounting challenges.

Non-GAAP financial measures and metrics

Technology entities must be aware of SEC requirements as non-GAAP financial measures and KPIs are leading causes of SEC comments.

Initial public offerings

Technology entities may have plans to eventually go public, so understanding SEC reporting requirements is as important as ever.

Technology, Media & Telecommunications Industry Accounting Guide

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Christie Simons

Christie Simons

Global Semiconductor Center of Excellence Leader | US A&A TMT Leader | Audit & Assurance Partner
+1 415 783 4777
Jean-Denis Ncho-Oguie

Jean-Denis Ncho-Oguie

US Technology Sector Leader | Audit & Assurance Partner
+1 415 783 6600