Technology Industry Accounting Guide
March 2023
We are pleased to present the inaugural edition of Deloitte’s
Technology Industry Accounting Guide (the “Guide”).
The technology industry ecosystem encompasses a wide array of
entities, from enterprise software and software-as-a-service providers to hardware
and semiconductor manufacturers. The technology industry has also experienced
convergence with other types of businesses, creating subsectors such as fintech,
health tech, energy tech, education tech, and auto tech, to name a few. Many
entities have fueled the significant growth of the technology industry by embracing
emerging technologies such as artificial intelligence and machine learning,
everything as a service powered by the cloud, robotics, the Internet of Things,
blockchain, and edge computing. Continuous innovation by technology entities
produces novel business models while introducing potentially complex accounting and
financial reporting matters.
Finance and accounting professionals in the technology industry face
complex issues and must exercise significant judgment in applying existing rules to
matters such as revenue recognition, software-related costs, acquisitions and
divestitures, consolidation, stock-based compensation, leases, financial
instruments, income taxes, digital assets, initial public offerings, and disclosures
of non-GAAP measures and metrics. To help technology entities work through some of
the more difficult accounting and financial reporting issues related to these and
other relevant topics, this Guide includes interpretive guidance, illustrative
examples, and discussion of recent standard-setting developments (through February
28, 2023).