Tariff Impacts: Top 10 Accounting and Financial Reporting Issues

What You Need to Know About Tariff-Driven Financial Reporting Risks

As U.S. tariff policies continue to evolve, the accounting implications for portfolio companies can be extensive. While many management teams are rightly focused on mitigating supply chain disruptions and operational hurdles, the financial reporting consequences of these tariffs require equal attention.

A&M financial experts have identified the top 10 accounting and financial reporting challenges arising from tariff impacts. These considerations are not only critical for year-end audits but are also increasingly relevant to financial due diligence and ongoing compliance efforts. For private companies, these issues are likely to emerge more forcefully as year-end approaches and auditors begin their reviews.

The introduction of tariffs can lead to a cascade of downstream accounting impacts, from inventory valuation and fixed asset impairment to revenue recognition and going concern analysis. Many public companies have already begun incorporating these into their quarterly disclosures, and private companies must be proactive to avoid surprises.

Our top 10 key accounting and financial reporting issues to consider in the current market environment are as follows:

1. Tariff capitalization into inventory
2. Higher inventory balances could lead to potential impairment charges
3. Inventory standard costing processes may need to be more frequently updated
4. Fixed asset value impacts
5. Revenue recognition impacts from price changes
6. Revenue recognition impact for percentage of completion-based companies
7. Deferred taxes
8. Transfer pricing implications
9. Foreign currency fluctuations
10. Going concern analysis

Tariff Accounting and Financial Reporting Issues Will Continue

The early stages of tariff implementation are just beginning, so the topics above are likely to continue to evolve as companies deal with numerous uncertainties from tariff impacts.

Failing to account for these issues early can result in audit delays, compliance risk or valuation gaps during transactions. A&M’s experts work directly with management teams to identify, assess and respond to emerging financial reporting concerns before they escalate.

Click below to read the full breakdown of accounting and reporting issues CFOs and audit teams should be preparing for.

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A&M understands the urgency to respond to these challenges and would like to discuss your best path forward as soon as possible.

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