What to Expect in 2025: Accounting Update and Hot Topics
Spring. It’s one of my favorite times of the year. The days are getting longer and the trees are in bloom (although I don’t like the pollen). March Madness (Go Gators!), The Masters, my spring OBX fishing trip, and planning for our annual U.S. GAAP Update course. I really like researching the topics and determining the agenda. This post provides a sneak peek into the accounting update and hot topics that most likely will be included in our U.S. GAAP Update (2025) course.
Typically, our U.S. GAAP Update course is a combination of the following: Refresher questions, ASUs effective in the current year, ASUs effective in the following year (and beyond), and hot topics based on comments by regulators and what we’re discussing with our clients.
Refresher questions
We usually start the course with a few refresher questions (i.e., mini cases / class discussion questions) to get the accounting juices flowing and get everyone warmed up. We also sprinkle them throughout, usually as a “tee up” to a new ASU before diving right into the meat.
This year we anticipate refresher questions on the following topics:
- Restructuring provisions and related termination benefits (ASC 420 and ASC 712)
- Modifications of share-based payment arrangements (ASC 718)
- Credit losses (ASC 326)
- Business combinations (ASC 805) and valuation of intangible assets acquired (ASC 350 and ASC 820)
- Fore currency transactions and translation of financial statements (ASC 830)
As you can see in the chart above, the FX markets are experiencing significant volatility in 2025, especially over the last couple of months. I’m sure you can guess why, but I don’t want to steal my thunder in the “Hot Topics” section below. Furthermore, we want to include coverage of this topic because we note that our foreign currency accounting topic page and this post are two of the most viewed pages on our site this year.
Accounting update: ASUs effective in 2025
The ASUs effective in 2025 are:
- Accounting for and disclosure of crypto assets (ASU 2023-08)
- Improvements to income tax disclosures (ASU 2023-09)
- Joint venture formations (ASU 2023-05)
- Stock compensation: Profits interest and similar awards (ASU 2024-01)
As part of my research, I utilized the Intelligize platform to determine which public companies adopted ASU 2023-09 early. This ASU deals with improvements to income tax disclosures and rather than use a generic example in our training materials, I wanted to get a “real-life” example to illustrate how companies are making such disclosures. Well, based on my search there were only a handful of companies that adopted ASU 2023-09 including Coinbase Global Inc. and Centene Corp. (picture above).
Accounting update: ASUs effective in 2026 and beyond
The ASUs effective in 2026 and beyond include:
- Disaggregation of income statement expenses (ASUs 2024-03 and 2025-01)
- Debt with conversion and other options (ASU 2024-04)
- Credit losses (ASC 326): Practical expedient and accounting policy election for private companies (final ASU expected 2Q 2025)
- Determining the acquirer in an acquisition of a VIE (final ASU expected 2Q 2025)
- Share-based consideration payable to a customer (final ASU expected 2Q 2025)
- Derivative scope refinements / hedge accounting improvements (final ASU expected 3Q 2025)
- Accounting for government grants (proposed ASU)
- Accounting for and disclosure of software costs (proposed ASU)
Of the ASUs that have been released, the one with the most coverage and applicability is probably ASU 2024-03 related to the disaggregation of income statement expenses, affectionately known as “DISE.” This ASU will create a new subtopic (ASC 220-40) and require public business entities (PBEs) to provide a further breakout of certain expense line items in the income statement. Specifically, on both an annual and interim basis, PBEs are required to disaggregate any “relevant expense caption” on the income statement. A relevant expense caption is one that contains at lease one of the required natural expense categories.
Hot topics
Literally, just before sitting down to write this blog, I was on a call with the Chief Accounting Officer of a new French client and he told me, and I quote, “Things have a been a bit difficult lately and most of it, you know, is originating from the U.S.” He was too polite to say that President Trump can’t seem to get out of his own way with respect to economic policy. And the biggest of his “own goals” thus far has to be his “on again off again” tariff policy and the corresponding retaliatory tariffs that will no doubt be imposed by our trading partners. Specifically, in our U.S. GAAP Update (2025) course we will discuss the financial reporting impacts of the proposed tariffs including:
- Inventory and cost capitalization
- Revenue from contracts with customers
- Asset impairments
- Transfer pricing and other income tax issues
- Financial statement disclosures
Of course, the year is only 4 months old and who knows what other hot topics we’ll need to discuss. Much like he does for comedians, his knee-jerk decisions always give CPAs plenty to chew on!
Final thoughts
The above topics are what we are including in our “standard” U.S. GAAP Update (2025) course. Of course, you can always tailor the course to the unique needs of your organization. If you’d like to learn how this works, let’s talk. Want to get a taste of what our update webinars are all about, I invite you to register for our webinar, A&A Hot Topics: What to Expect in 2025. Hope to see you there!
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Disclaimer
This post is for informational purposes only and should not be relied upon as official accounting guidance. While we’ve ensured accuracy as of the publishing date, standards evolve. Please consult a professional for specific advice.
