In early 2025, President Trump announced tariffs on imported goods from numerous countries. The amounts and effective dates of the tariffs have shifted several times and may continue to do so, which has resulted in global economic uncertainty and created market volatility. The U.S. tariffs sparked responses from governments worldwide, with some announcing that they intended to levy reciprocal tariffs on goods imported from the U.S., some implementing countermeasures, and others intending to negotiate with the U.S.
As a result of the tariff activity, stock prices of U.S. publicly traded entities have fluctuated dramatically. Consumers have decreased or are considering decreasing their discretionary spending in anticipation of higher prices or are purchasing or preparing to purchase goods in anticipation of higher prices. Tariffs and market volatility may expose entities to new risks, including disruptions to supply chains and increased production costs. Shifting consumer demand also can affect entities’ financial projections and asset valuations. As a result, the direct and indirect effects of tariffs and the ensuing economic uncertainty and market volatility can affect financial performance in a variety of ways.
This publication discusses key accounting, SEC reporting, and auditing considerations with respect to the effects of tariffs and the resulting economic uncertainty, including the following:
- Revenue recognition
- Impairment of nonfinancial assets (such as goodwill, intangible assets, and inventory)
- Income tax accounting
- Disclosures about subsequent events and risks and uncertainties
- SEC reporting considerations (for example, with respect to the description of the business, risk factors, MD&A and quantitative and qualitative disclosures about market risks, and items that might trigger reporting on Form 8-K)
- Non-GAAP measures
- Internal controls over financial reporting
- Auditing considerations (including the effects on the risk assessment process, obtaining sufficient appropriate audit evidence and the audit report)
- Corporate governance and shareholder considerations
View the full publication for more guidance on these topics.
For more technical guidance, see our Accounting Standards & Reporting Matters library for BDO’s latest publications.