Year in Review — 2025

Welcome to Quarterly Accounting Roundup: Year in Review — 2025. Over the past year, entities have been continuing to navigate the uncertainties of the current economic environment. Top of mind for many entities have been the accounting and financial reporting effects of (1) the new U.S. tax legislation (commonly known as the “One Big Beautiful Bill Act”) and (2) tariffs.

The centerpiece of the One Big Beautiful Bill Act is the extension of expiring — and in some cases expired — provisions of the 2017 Tax Cuts and Jobs Act. While many of the One Big Beautiful Bill Act’s provisions focus on tax changes for individuals, such as extending current individual tax rates originally put in place in the Tax Cuts and Jobs Act, it also adjusts a number of provisions affecting businesses that were similarly subject to sunsets, phase-outs, or phase-ins that would have taken effect in the absence of action by Congress or that have already taken effect.

Regarding tariffs, though they are not new to the global economic landscape, their prominence and impact have grown significantly in recent months as a result of rapid increases in tariff rates and shifting trade patterns. The introduction or modification of import taxes can significantly alter existing cost structures, disrupt supply chains, and create new operational and compliance challenges, which can, in turn, lead to significant accounting and financial reporting implications. Tariff rate changes may necessitate a review of existing business controls to ensure compliance with trade regulations and mitigate new financial risks.

The FASB also had a busy 2025, especially in the latter half of the year. Accounting Standards Updates (ASUs) released by the Board in 2025 include those on:

• Making improvements to the FASB Accounting Standards Codification® (December).
• Narrow-scope improvements to the interim reporting requirements (December).
• The accounting for government grants (December).
• Hedge accounting (November).
• The accounting for purchased loans (November).
• Derivatives scope refinements and a scope clarification related to share-based consideration from a customer in a revenue contract (September).
• The accounting for and disclosure of software costs (September).
• The measurement of credit losses for accounts receivable and contract assets (July).
• Share-based consideration payable to a customer (May).
• Identifying the accounting acquirer in a business combination (May).
• Clarifying the effective date of the ASU on disaggregation of income statement expenses (January).

In addition, since the previous release of Quarterly Accounting Roundup, the FASB issued a proposed ASU on measurement of paid-in-kind (PIK) dividends on equity-classified preferred stock.

Sustainability also continued to be a major topic of interest either for entities that do business in California or for those that are subject to the European Union’s (EU’s) sustainability reporting and due diligence requirements. The California Air Resources Board (CARB) hosted several virtual public workshops in 2025 “to support development of California’s Corporate Greenhouse Gas Reporting Program and the Climate-Related Financial Risk Disclosure Program” established by the Climate Corporate Data Accountability Act (SB 253) and Climate-Related Financial Risk Act (SB 261), as amended by SB 219. CARB also released a range of informational materials to help entities prepare for the potential effects of the climate legislation in advance of the reporting deadlines. Meanwhile, the European Parliament recently voted to approve the provisional agreement reached with the European Commission and European Council regarding the European Commission’s February 2025 omnibus package of proposals that would simplify the EU’s sustainability reporting requirements, including the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and the EU Taxonomy Regulation.

On the regulatory front, crypto assets continued to be a major focus. The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act was signed into law in July 2025, establishing the first U.S. regulatory framework for payment stablecoins. In addition, the SEC released a number of statements regarding crypto assets. Topics of these statements included liquid staking, crypto asset exchange-traded products, protocol staking activities, offerings and registration of securities in crypto asset markets, stablecoins, proof-of-work mining activities, and meme coins.

Other important releases by the SEC include several updates to its Financial Reporting Manual (FRM) and FAQs that provide guidance to issuers that filed registration statements with the Commission during the recent U.S. government shutdown. The Commission also established task forces on crypto assets, artificial intelligence (AI), and fraud.

Quarterly Accounting Roundup: Year in Review — 2025 summarizes final guidance that affects reporting and disclosures for the coming reporting season. With the exception of fourth-quarter developments, proposed guidance is not included. For more information about earlier proposals, please see issues of Quarterly Accounting Roundup for the first three quarters of 2025.

In addition, in this year-end edition, an asterisk in the article title denotes events that occurred in the fourth quarter, including updates to previously reported topics, or that were not addressed in previous 2025 issues of Quarterly Accounting Roundup. Events without asterisks were covered in previous issues.