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Navigating tariff turbulence to your business and your accounting · PwC's accounting podcast

0:00
SPEAKER_01: Thought leadership from PWC's National Office.
0:06
SPEAKER_03: Hello, and welcome to PWC's Accounting Podcast.
0:10
SPEAKER_03: I'm Heather Horn.
0:12
SPEAKER_03: Today we're bringing you a special episode on tariffs, an issue that's at the forefront of the new administration's agenda and a topic that's making headlines every day.
0:23
SPEAKER_03: In this episode, we'll explore the business implications of these tariffs and dive into some of the key accounting considerations.
0:33
SPEAKER_03: For this discussion, I'm happy to be joined by Chris Dowsmond, one of the leaders of PwC's U.S.
0:39
SPEAKER_03: Global Trade Services team, who brings insights into the current landscape, what we can expect next, and implications for businesses.
0:47
SPEAKER_03: Also joining me is Pat Gerbin, a deputy chief accountant in PWC's national office.
0:53
SPEAKER_03: And many of you, of course, are familiar with Pat from previous podcast webcasts, and he'll bring some context on tariffs and what they mean for financial reporting.
1:02
SPEAKER_03: With that, let's start the recording.
1:05
SPEAKER_03: So, Chris, Pat, welcome to the podcast.
1:07
SPEAKER_03: So nice to have you guys on today.
1:08
SPEAKER_03: And it's a very timely topic because it's very hard to miss the shift in trade policy under the new administration.
1:15
SPEAKER_03: And I think almost every day we're seeing new tariffs, new potential tariffs, or otherwise.
1:20
SPEAKER_03: So it's definitely an interesting time.
1:24
SPEAKER_03: So maybe, Chris, if we could start things off by talking a bit about a high-level overview of the current landscape.
1:31
SPEAKER_03: And as you and I, we were speaking right before this.
1:34
SPEAKER_03: We know we're recording this today on March 12th, but things are moving rapidly.
1:38
SPEAKER_03: So this may change slightly by the time our listeners are listening.
1:42
SPEAKER_03: But again, the big picture I think would be helpful.
1:44
SPEAKER_02: No, that's that's fantastic.
1:46
SPEAKER_02: Thanks for thanks for inviting me on the podcast.
1:48
SPEAKER_02: This is really great.
1:50
SPEAKER_02: And the environment is changing, as you mentioned, uh day-to-day.
1:54
SPEAKER_02: And I think that just to give a rundown of all the tariffs as today is not that useful.
1:59
SPEAKER_02: It's really more impactful to talk about what this has in store for the future.
2:03
SPEAKER_02: Because even the terrorists, as of this week, things have been peeled back, things have been delayed.
2:09
SPEAKER_02: The big dates, though, to look at is coming probably April 1st, April 2nd.
2:14
SPEAKER_02: When inauguration happened on January 20th, we had the American first trade policy that came out.
2:21
SPEAKER_02: That's a really important document because that's talking about an investigation on pretty much every trading partner, USMCA, all free trade agreements, but also trade deficit countries.
2:34
SPEAKER_02: And if you're operating with countries that have a trade deficit, that's going to be on the important list because we are probably going to look at potentially surgical tariffs at that point in time.
2:46
SPEAKER_02: Then, shortly thereafter, we also had the reciprocal tariff plan that came out.
2:52
SPEAKER_02: And that one was a little bit more fuzzy because it talked about how we might be imposing reciprocal tariffs on various countries based upon what they tariff us in those countries for exports in the U.S.
3:06
SPEAKER_02: And the curveball that came in since we're entering baseball season is that we are looking at including VAT, which bumps those rates up quite a bit.
3:17
SPEAKER_02: So when you get into the numbers, uh the potential rates with those two combined can be rather high.
3:23
SPEAKER_02: And so when you're looking at it from a, I would say, a company perspective, C-suite perspective, finance perspective, and saying, what does this mean to my operating model?
3:33
SPEAKER_02: I would bring those two pieces together.
3:36
SPEAKER_03: All right.
3:36
SPEAKER_03: So uh always on the podcast, we like to make sure we're explaining all the terms that people are using.
3:42
SPEAKER_03: So I some are self-evident, but let me run through two that I heard.
3:46
SPEAKER_03: And then Pat, maybe if you heard any other, it's that I didn't catch.
3:49
SPEAKER_03: Uh so recipro let's start with reciprocal tariffs.
3:51
SPEAKER_03: Now it sounds like the name means exactly what it says, but can you explain when we say reciprocal tariffs what that means?
3:58
SPEAKER_02: The idea is that um the US, when countries export into the US, most all these countries do not have a tariff um when goods are exported to the US.
4:10
SPEAKER_02: And the administration is looking at that and saying, well, that's great.
4:13
SPEAKER_02: But when the US exports goods that are made in the US to um non-US locations throughout the world, there are often tariffs that are applied to those US goods based upon product categories.
4:27
SPEAKER_02: And dare I say another acronym HTS classifications, but that is how tariffs are administered with a harmonized tariff code from a global perspective.
4:37
SPEAKER_02: And those goods being you know imported in those foreign jurisdictions not only have a tariff, but there's also in many countries a value-added tax at VAT that comes into play.
4:49
SPEAKER_02: And people can debate whether or not the VAT should be included in a quote-unquote reciprocal tariff, but it is listed under Section 2A of the Fair and Trade Policy, that that is something that is going to be taken into consideration as part of the investigations that are going on for reciprocal tariffs.
5:10
SPEAKER_02: So we're anticipating, if you take a step back, April 1st, April 2nd, these two investigations to come to a head and the administration to come out and talk through their findings and have really a listing of what the potential tariffs may be on U.S.
5:28
SPEAKER_02: imports across the world by country, maybe by product grouping, and maybe by HTS class.
5:36
SPEAKER_02: But when you get into that level of detail, like if you were to tariff each individual country by HTS class, you you're dealing with almost like 2.5 million derivations of tariffs.
5:47
SPEAKER_02: They're probably not going to do that.
5:49
SPEAKER_02: But there's going to be some level of reciprocal tariffs that are coming out.
5:54
SPEAKER_03: Did I miss any terms, Pat?
5:55
SPEAKER_00: Aaron Powell So the one I was going to just uh delve in a little bit on is you talk about countries with a trade deficit, and we hear those terms thrown around.
6:03
SPEAKER_00: But just to maybe clarify what that means, and in this context, why the U.S.
6:08
SPEAKER_00: would be kind of targeting those countries.
6:11
SPEAKER_02: So the first administration under Trump, this was a big piece of unfairness in trade, talking through, well, we shouldn't be um importing more than we export to countries because that's a trade deficit.
6:25
SPEAKER_02: That's a trade deficit.
6:26
SPEAKER_02: Thank you.
6:27
SPEAKER_02: That's exactly what that is.
6:29
SPEAKER_02: And part of the mindset, and you even hear about um the Trump administration talking about this, is that the U.S., if we are in a trade deficit, we're shifting wealth to those countries that was once here.
6:42
SPEAKER_02: That's the mindset.
6:43
SPEAKER_02: Whether people agree with that or not, you know, that's another discussion.
6:46
SPEAKER_02: But that is the concept of trade deficit.
6:49
SPEAKER_02: And the usual suspects are on that list.
6:51
SPEAKER_02: So we've done an industry impact analysis going through kind of the hardest-hit countries that we might see for trade deficit.
6:58
SPEAKER_02: And we already have our number one on the list being China, number two, Mexico.
7:02
SPEAKER_02: But after that, that's where people's eyes start to open because all of a sudden you have Vietnam.
7:07
SPEAKER_02: Vietnam, well, we don't have tariffs in Vietnam right now, but if we do, there's some major industries and consumer markets and apparel that are going to be hit hard, and they already have some tariffs on consumer goods coming to the U.S.
7:21
SPEAKER_02: from the apparel industry.
7:22
SPEAKER_02: Then you also have Germany as a big one, but then Ireland.
7:26
SPEAKER_02: So Ireland, if you think about it, what kind of products are uh you know we we get from Ireland?
7:32
SPEAKER_02: Well, that's where a lot of tax structures were put in place.
7:34
SPEAKER_02: It's where a lot of manufacturing for the uh pharma industry is.
7:39
SPEAKER_00: If all of a sudden we're dealing with um targeted tariffs on products from Ireland, so for example, royalties we pay to Ireland to use that IP in the U.S., that would be potentially subject to a tariff?
7:53
SPEAKER_00: So no, not royalties.
7:55
SPEAKER_02: Um, it's only for tangible properties.
7:57
SPEAKER_02: So it's only going to be um Ireland manufacturing a tangible good.
8:02
SPEAKER_02: And once it crosses the U.S.
8:04
SPEAKER_02: border upon importation to the U.S.
8:06
SPEAKER_02: is when the tariff is assessed.
8:08
SPEAKER_02: Okay.
8:08
SPEAKER_03: All right.
8:08
SPEAKER_03: So one less accounting implication of Pat that we have to think about.
8:11
SPEAKER_03: That was a good question.
8:12
SPEAKER_00: But I think it's really important, like that list of the trade deficit countries, because the headlines are around, you know, China.
8:18
SPEAKER_00: Obviously, everyone knows big import, we import a lot from China, Mexico, Canada, right, our neighbors.
8:24
SPEAKER_00: But when you start looking at all those other countries where we're, you know, importing more than we export to, which is a lot, right?
8:31
SPEAKER_00: That that expands the scope of the tariff uh situation quite significantly.
8:36
SPEAKER_03: And I guess, Chris, this I'm sure is a topic that we could spend years studying.
8:40
SPEAKER_03: And we, you know, I don't want to go too deep into the background, but just from a big picture for people in the audience who are wondering, like, why tariffs?
8:50
SPEAKER_03: Is it because of fairness?
8:52
SPEAKER_03: You mentioned fairness, or you know, why is is this something that we would be so focused on as such a uh a priority of the administration?
9:03
SPEAKER_02: It's probably one of the number one questions I'm asked uh after I go through the current policy, and then I hear anger from the other side of the table about why is this happening?
9:13
SPEAKER_02: Why are they picking on the we have to pay?
9:16
SPEAKER_02: Yeah.
9:17
SPEAKER_02: Um what's what's the goal?
9:19
SPEAKER_02: What is the agenda that the administration has?
9:22
SPEAKER_02: From my view, the goal is not to pick on any one country.
9:26
SPEAKER_02: It's actually not necessarily all about trade.
9:30
SPEAKER_02: There's a bigger picture involved with all this.
9:32
SPEAKER_02: It not only deals with how we are uh working with countries from a fair trade perspective, which is a key piece, but also there are other things in the background which focuses on the America First Plan.
9:45
SPEAKER_02: And the American First Plan is not just trade, but it's also dealing with how do we incentivize multinationals to do business here?
9:54
SPEAKER_02: How do we incentivize them to onshore their manufacturing, produce things in America, and really protect our labor, our economy, our resources?
10:04
SPEAKER_02: And that then plays into what other things can you change, and that's also tax.
10:09
SPEAKER_02: So tax reform.
10:10
SPEAKER_02: So tax reform is going to be coming out sometime in September, we believe.
10:15
SPEAKER_02: And we're already hearing about studies that are being done when we're talking with our policy team on incentives that might be there for uh companies from a manufacturing perspective or even onshoring.
10:27
SPEAKER_02: We don't know what that's going to look like, but all of that comes into play in balancing with the trade and the tariffs.
10:35
SPEAKER_02: Because when you look back and you look at it from a company perspective, they have to do the math on this.
10:42
SPEAKER_02: What is going to be my short and long term related to the tariff impacts?
10:46
SPEAKER_02: But also if I'm onshoring and all of a sudden I have incentives that have, from a tax perspective, reduced the impact, where now I'm looking at it and saying, well, why do I need to manufacture in those locations if I can do it here in the U.S.
11:01
SPEAKER_02: And it's pretty much the same cost?
11:04
SPEAKER_02: That that's where you start to change the longer-term planning that companies are considering with their operations?
11:12
SPEAKER_03: Yes, except for you talk about longer-term planning, but tariffs can go.
11:17
SPEAKER_03: I could announce today that I'm going to have tariffs tomorrow.
11:19
SPEAKER_03: Longer-term planning to onshore manufacturing could take a few years.
11:24
SPEAKER_03: And so if I'm a company and I start to think, okay, you mentioned all these countries, I know you have more on your list.
11:30
SPEAKER_03: What does this really mean then from an operations and then of a supply chain perspective?
11:35
SPEAKER_03: Because again, it's not like I can build a factory in a day.
11:39
SPEAKER_02: That would be pretty cool if you did.
11:41
SPEAKER_02: Yes, exactly.
11:41
SPEAKER_02: I would say that's a good idea.
11:42
SPEAKER_02: We would have a different podcast for that.
11:44
SPEAKER_03: I would not be the host of this podcast if I was into that.
11:47
SPEAKER_02: Uh if you think about what's happened from the original tariffs in 2018, they're still here.
11:53
SPEAKER_02: In fact, they went up in the last administration and they've gone up now again, uh, related to China.
11:59
SPEAKER_02: But China's a special piece in the whole uh, I would say, trade policy.
12:04
SPEAKER_02: The tariffs that we're seeing for China, I don't see those going away anytime soon.
12:09
SPEAKER_02: Those are gonna be longer-term planning, to your point.
12:12
SPEAKER_02: Those are the ones where if that's impacting my supply chain greatly now, I would probably make sure I consider things.
12:18
SPEAKER_02: But then when you consider things, where are you going to go?
12:22
SPEAKER_02: Your next best option, crystal ball, you need to take out because you don't know what's going to be announced on April 1st or 2nd for either the America First Trade policy or the reciprocal tariffs combined, the place you might be targeting to go, let's say Vietnam, would all of a sudden become tariffed as well.
12:43
SPEAKER_02: And so we have different tranches of levels of where the tariffs may come into play.
12:48
SPEAKER_02: But also, I think where you're going is how long do we think they're going to stay?
12:53
SPEAKER_02: So for me, when I look at North America, I don't believe that whatever tariffs we have going on with Mexico and Canada, the switch will probably turn on in April more than it is now.
13:07
SPEAKER_02: And when that happens, I don't think that's long-term.
13:11
SPEAKER_02: In fact, we the goal of the administration that we've already heard from the American First Trade Policy is they want to renegotiate USMCA now, not wait till July 2026.
13:22
SPEAKER_02: So by increasing tariffs, you're bringing people to the table to make an agreement.
13:27
SPEAKER_02: So when you're talking with companies and they're thinking about the impacts, a lot of companies are impacted by Canada and Mexico.
13:34
SPEAKER_02: If you're able to then say, well, how how can I weather the storm and how long is that storm going to be?
13:40
SPEAKER_02: I personally don't see it going until July 2026.
13:43
SPEAKER_02: My guess is that it might be something that could be as early as this fall.
13:47
SPEAKER_00: Yeah, I was just going to ask, because I think that question of like, are these just sort of a negotiating tool to get to sort of the long game or the the end game with some of these countries.
13:58
SPEAKER_00: But it sounds like there's different flavors for different parts of the world or different countries, right?
14:03
SPEAKER_00: So we might expect China to persist, but maybe the Mexico and Canada ones maybe have a shorter horizon.
14:09
SPEAKER_02: Exactly.
14:09
SPEAKER_02: And I think that those are the two extreme ends of the of the uh of the spectrum.
14:14
SPEAKER_02: But then in the middle, you have all the rest of the world stuff.
14:16
SPEAKER_02: And you look at Europe.
14:18
SPEAKER_02: So there's there's a there's a little bit of a dogfight building up with Europe.
14:21
SPEAKER_02: And I don't see that going away immediately.
14:23
SPEAKER_02: That's going to probably last longer than Canada, Mexico, but there's a lot to lot to unwind there.
14:29
SPEAKER_02: And the challenge with that, just like if we go back to the deficit countries, we have certain countries in Europe that operate at a deficit, and then certain ones that are surplus.
14:38
SPEAKER_02: If we do targeted reciprocal tariffs based upon that, EU operates together.
14:45
SPEAKER_02: So how do you then reciprocate retaliatory tariffs when it impacts different countries in different ways?
14:52
SPEAKER_02: And some countries will say, well, I don't want that because we don't have tariffs.
14:56
SPEAKER_03: Wow.
14:56
SPEAKER_03: So definitely a lot to think about.
14:58
SPEAKER_03: And I I do want to get to the counting implications, but let me ask a question for us.
15:02
SPEAKER_03: You mentioned USMCA a couple times.
15:04
SPEAKER_03: So what does that stand for and what does it relate to?
15:07
SPEAKER_02: Aaron Ross Powell Yeah, that is the agreement we have with uh U.S., Canada, and Mexico related to free trade.
15:13
SPEAKER_02: Um that's what was re uh negotiated in Trump's administration earlier.
15:18
SPEAKER_02: Uh and that's what uh Robert Leitheiser negotiated uh as part of the big piece of uh settling that and getting that agreement in place.
15:25
SPEAKER_02: So basically that allows all the free trade across the border because even when you think about certain types of products like automobiles, automobiles could cross the border back and forth between Canada, U.S., and Mexico up to eight times before it's seen some photos of it moving back and forth, very or diagrams, very interesting.
15:43
SPEAKER_02: Yeah.
15:43
SPEAKER_02: So you can only imagine the auto company saying, whoa, whoa, whoa, whoa, hold on.
15:47
SPEAKER_02: So we're talking about tariffs and what point and how many times, and what kind of you know, forgiveness do we get?
15:54
SPEAKER_02: Do we get uh things related to we have things called Chapter 98 in customs that allows you to then say, well, it's already been here, so we don't have to, you know, tax it, tariff it again.
16:03
SPEAKER_02: Um but there's a lot of industries that this is gonna be very impactful.
16:07
SPEAKER_02: So for USMCA, that's a really important agreement.
16:10
SPEAKER_02: But basically, if we're putting together tariffs right now, we're seeing that agreement's no longer valid.
16:16
SPEAKER_02: And so that's the reason for the push to bring the parties to the negotiating table.
16:20
SPEAKER_02: And that's why uh Canada is already gonna be meeting with the U.S.
16:24
SPEAKER_02: to see if they can jumpstart that agreement negotiation now.
16:28
SPEAKER_03: All right.
16:28
SPEAKER_03: Well, maybe let's come back to the tariffs.
16:31
SPEAKER_03: But in the meantime, Pat, from a financial reporting perspective, all this uncertainty is very hard to account for.
16:37
SPEAKER_03: But what are you seeing as some of the issues companies should be thinking about?
16:40
SPEAKER_00: So maybe just starting with the basics, I mean, tariffs are an additional cost that someone is going to bear.
16:47
SPEAKER_00: Initially, it's the first importer of those goods.
16:50
SPEAKER_00: They're gonna have to pay the tariff to get the goods into the country, right?
16:55
SPEAKER_00: So depending on the nature of what that item is, if it's something they're going to use in their business as a piece of equipment or they're going to use it to build a facility, that's gonna go into the cost of their fixed assets.
17:08
SPEAKER_00: Um, if it's inventory or goods that they're going to use to produce something or otherwise sell, then it becomes part of their cost of inventory.
17:16
SPEAKER_00: So that direct accounting implication is relatively straightforward.
17:20
SPEAKER_00: And tariffs aren't new.
17:22
SPEAKER_00: We've had them for a long time.
17:24
SPEAKER_00: Maybe they're just getting obviously a lot more prevalent, a lot more significant.
17:28
SPEAKER_00: So the real consequence is the economic consequence, right?
17:32
SPEAKER_00: It's it's an increase in the cost of doing business for any company that's got exposure to it, which is probably most companies.
17:41
SPEAKER_00: So then the question is, okay, what do I do with that higher cost base that now is presumably on my balance sheet, either for a short term in inventory or maybe for a longer term in my fixed asset base, or otherwise impacting my future operations and the prospects for future cash flows from those operations?
18:02
SPEAKER_00: So higher costs, all other things being equal, mean I'm going to have less cash flows coming in in the future, which raises the question of do I have the same value in my business?
18:14
SPEAKER_00: Can I recover the cost of my manufacturing facilities?
18:18
SPEAKER_00: Um, do I have goodwill that might be subject to an impairment now because the fair value of my business has decreased?
18:25
SPEAKER_00: That's going to depend on what ability I have to pass it on to my consumers, what other disruption in the market that I'm operating in might arise, you know, different sources of supply, people choosing to buy from different places where they can sort of avoid or mitigate the impact of tariffs, like all those dynamics.
18:46
SPEAKER_00: And then when we talk about the uncertainty of how long they last, when they'll be implemented, you know, create a very dynamic landscape to try to navigate.
18:57
SPEAKER_00: So I think trying to figure all that out and then apply it back to the financial reporting is going to be challenging for finance teams.
19:04
unknown: Trevor Burrus, Jr.
19:05
SPEAKER_03: Yeah.
19:05
SPEAKER_03: So, Pat, just as a follow-up question, then if I'm thinking about impairments, in particular, whether it's fixed asset or goodwill, and we just talked about all this uncertainty.
19:15
SPEAKER_03: And so hopefully most of our listeners are not dealing with impairments on March 31.
19:20
SPEAKER_03: But to the extent you are dealing with impairments and then you with this huge unknown, how do companies think about that?
19:28
SPEAKER_00: Yeah.
19:28
SPEAKER_00: So I think if we take the long-lived assets or goodwill impairment models, those are at least in part fair value-based impairment models, right?
19:38
SPEAKER_00: The long-lived assets, you start first with a question of whether the undiscounted cash flows are going to be sufficient to recover your costs.
19:46
SPEAKER_00: But inherent in those future cash flow estimates is some estimate of what the impact of the tariffs are going to have.
19:54
SPEAKER_00: And that is challenging, right?
19:56
SPEAKER_00: Because it's subject to the company specific circumstances, what the market's expectation is relative to the significance of those tariffs, how long they're likely to persist.
20:07
SPEAKER_00: So, well, I mean, in fact, it would be easy if we had a we had clarity today on March 12th because of the tariffs that have sort of been announced or imposed.
20:17
SPEAKER_00: But as they continue to sort of get put on, taken off, there's now the specter of new tariffs being implemented on April 2nd, which is actually after the March 31 balance sheet date.
20:29
SPEAKER_00: But yet presumably there would be a high degree or a high expectation from the market of those tariffs being imposed.
20:36
SPEAKER_00: That would need to be considered as you're thinking about your balance sheet as of March 31st.
20:42
SPEAKER_00: There is no simple answer for how to factor the tariffs into those models, but they will need to be factored in.
20:51
SPEAKER_00: They will likely impact the fair value of reporting units.
20:54
SPEAKER_00: They will likely impact your expectation of future cash flows from your long-lived asset groups.
21:00
SPEAKER_00: So if you have a lot of exposure to tariffs, there is clearly a lot of work that's going to need to be done to try to calibrate those assumptions and estimates and figure out what it means.
21:12
SPEAKER_03: So actually I think that's a great lead-in then to maybe going back to Chris.
21:16
SPEAKER_03: And I know you said that you've done some work and analysis on those reciprocal tariffs and the potential impact.
21:23
SPEAKER_03: So what are some of the findings that you would share?
21:26
SPEAKER_02: Well, I if I can just jump to responding to something that Patrick's talking about is uh one of the things that we do for companies is we do an impact assessment and we actually use a different data source.
21:38
SPEAKER_02: We actually use um US customs data.
21:41
SPEAKER_02: So most people don't know this unless you're part of the customs group, but U.S.
21:46
SPEAKER_02: customs houses a database that is private and only that company can access it.
21:51
SPEAKER_02: But then they can provide um their brokers, forwarders, and companies like us access to it.
21:58
SPEAKER_02: So we then use that to Do estimates of the impact on what's actually happening, but what could happen to your point on reciprocal tariffs, but also the tariffs now.
22:08
SPEAKER_02: The part that's really eye-opening to me is that when you talk about estimates, when we go through and present those estimates, oftentimes there are varying results because of how companies are looking at their own ERP data compared to another data source like customs, as well as then the assumptions are used and how the tariffs are going to be applied.
22:28
SPEAKER_02: And we're seeing variances as much as 25% to even 400%.
22:33
SPEAKER_02: So I think this is going to be like a, hey, what is what is something I might want to take home?
22:38
SPEAKER_02: Please ensure you check more than your own data source of your own data, if you can, related to whatever forecasting you're talking about.
22:46
SPEAKER_02: I think that's a big key piece that maybe folks don't realize is out there.
22:51
SPEAKER_02: So to then your point on reciprocal tariffs.
22:54
SPEAKER_02: So part of the calculations we would do for a company and saying, what are the estimates for reciprocal tariffs?
23:00
SPEAKER_02: We just got done finishing an industry impact analysis to say we were able to access all of U.S.
23:07
SPEAKER_02: Census data.
23:08
SPEAKER_02: We were able to look at all imports into the U.S.
23:11
SPEAKER_02: over a year of 2024, calendar year 2024.
23:15
SPEAKER_02: So roughly$3.1 trillion of goods comes into the United States every year, of an amount just less than$1 trillion deals with goods that are already tariffed.
23:28
SPEAKER_02: So that leaves that residual amount of about$2.1 trillion of goods that currently are not being tariffed, but those could be subject to tariffs, not only with Mexico and Canada, but the rest of the world reciprocal tariffs.
23:42
SPEAKER_02: And that's where, you know, if you look at the run rate, right now we collect about$76 billion in tariffs in 2024.
23:50
SPEAKER_02: That can jump to$620 billion based upon the tariffs that we're thinking about may happen with not only U.S.
24:00
SPEAKER_02: and Mexico, but related to the retaliatory tariffs.
24:03
SPEAKER_02: And so that group that was at$2.1 trillion that is zero tariff now, that can jump to$424 billion.
24:11
SPEAKER_02: These are big leaps.
24:13
SPEAKER_02: And there's some big industries that are potentially going to be impacted by it.
24:17
SPEAKER_02: Because if I think about what it was like in 2018 when we had the tariffs going on in China, there's a lot of companies that were zero tariffed at that time, like our semiconductor companies, where they're like, we're not ready for this.
24:29
SPEAKER_02: We don't have a group that deals with tariffs or customs and like this.
24:34
SPEAKER_02: And so we need to put that in play and please help.
24:37
SPEAKER_02: Well, we're going to have a lot of other companies.
24:40
SPEAKER_02: If we have these retaliatory tariffs come into play, they're going to be in that same position where they don't deal with a lot of tariffs now, and all of a sudden they may, because their supply chains depend upon locations such as Mexico, Canada, and rest of the world, that right now they might be operating duty-free.
24:59
SPEAKER_02: And so that's where those reciprocal tariffs could have a very large impact when you start doing the numbers.
25:04
SPEAKER_02: And the numbers we're seeing, if you think about like the percentages pre-inauguration, where we heard 10 percent, 20 percent, and that's people they were using that to forecast.
25:15
SPEAKER_02: Now we have more definitive guidance with the, you know, what we talked about earlier in the podcast, with the rates of importation to those countries combined with VAT, the range of rates have now jumped to maybe 10 percent to 40 or 50 percent based upon country.
25:34
SPEAKER_02: So this is making it more difficult for companies to do some forecasting, but also it it provides a little bit more uncertainty until we kind of find out April 2nd.
25:44
SPEAKER_03: Wow.
25:45
SPEAKER_03: So, Pat, again, with sort of that context of spatdrop, if you mentioned some high-level accounting considerations, but what are some of the key areas then that you would be focused on from an accounting point of view?
25:58
SPEAKER_00: Yeah, so I mean, just tactically, right?
26:00
SPEAKER_00: Um, you have to deal with it in the inventory context.
26:03
SPEAKER_00: So is your inventory cost recoverable?
26:06
SPEAKER_00: So that's our net realizable value assessment.
26:08
SPEAKER_00: Um there could be some implications to customer contracts.
26:12
SPEAKER_00: You may have contracts that actually provide some pricing escalation mechanism if there is some sort of a you know import duty or tariff.
26:21
SPEAKER_00: Um, a lot of contracts won't.
26:23
SPEAKER_00: So then you'll need to figure out if you're going to be able to renegotiate those contracts to increase the price or not.
26:30
SPEAKER_00: So that's uh, again, a bit more tactical.
26:33
SPEAKER_00: Um when we get into the valuation question.
26:36
SPEAKER_00: So we talked a little bit about goodwill and long-lived assets.
26:39
SPEAKER_00: Um, that introduces all the fair value questions.
26:42
SPEAKER_00: I think some of your advice, Chris, in terms of where you can get data on how to think about those forecasts is really helpful.
26:48
SPEAKER_00: Um the other area where you need to think about it is any of those forward-looking assessments.
26:54
SPEAKER_00: So your income tax or your deferred tax assets and assessing their realizability, those could be impacted again, not directly because tariffs aren't an income tax and the book and tax accounting for tariffs is pretty similar, but obviously, as that puts pressure on your future operating results, that could also put pressure on your valuation allowance assessment.
27:15
SPEAKER_00: And then in the more extreme case, when we talk about just the magnitude of this, some of the industries that are more specifically impacted, depending on how well capitalized the company is today, you could even get into a situation where this is starting to have implications on the going concern assessment that companies are required to evaluate and disclose if there are circumstances that give rise to substantial doubt.
27:38
SPEAKER_00: So all of those could potentially be in play as things you need to think about.
27:42
SPEAKER_03: Yeah, but then it's interesting because as Chris was talking, and and you made this point earlier too, Pat, if these are temporary, well, some are going to maybe stay, and then others are temporary.
27:55
SPEAKER_03: There's a lot of interplay then of, again, all this uncertainty in making some of these evaluations.
28:00
SPEAKER_00: And that's a great point, too, because beyond just any of these direct consequences where you might actually have to do something in the financial statements, all of those uncertainties are things that really ought to be on the table for disclosure somewhere to the readers of your financial statements or your broader package of disclosures, whether it's risk factors or in your management's discussion and analysis with relative to liquidity and capital resources or just even results of operations.
28:26
SPEAKER_03: So let's go into some of the specifics then, Pat.
28:28
SPEAKER_03: So you talked about you mentioned inventory.
28:31
SPEAKER_03: So if we're thinking about tariffs then, especially in the context of inventory or fixed assets or otherwise, what are some of the specific considerations then?
28:40
SPEAKER_00: So as it relates to inventory, it's simple.
28:43
SPEAKER_00: Um the tariffs are a cost of the inventory.
28:45
SPEAKER_00: You have to then assess whether that higher cost can be recovered through the same lower of cost or net realizable value assessment you're applying today.
28:53
SPEAKER_00: And so all other things being equal, it just depends on your margins.
28:56
SPEAKER_00: You might be in a situation where that creates a problem.
28:59
SPEAKER_00: You need to then address your or adjust your inventory carrying amount.
29:04
SPEAKER_00: The the interesting thing about, and some of this timing stuff could be really interesting in terms of what you have to really project forward using the marketplace expectations, which would be appropriate, say, in the fair value-based assessments.
29:18
SPEAKER_00: Inventory is one of these kind of old-fashioned things where it's really focused on what's your expectation of the estimated selling price that you'll be able to realize from that inventory in the ordinary course of business.
29:31
SPEAKER_00: So you have a little bit more flexibility in terms of what you think you'll be able to recover versus some generic marketplace participant expectation.
29:41
SPEAKER_00: If we go to the long-lived assets and goodwill, I think the important thing to focus on really is obviously how to determine the impact on cash flows, which will drive your fair value, but it's really also a timing question.
29:56
SPEAKER_00: And I think we're maybe a little bit fortunate that some of the initial tariff action didn't happen until sort of well after the calendar year end.
30:06
SPEAKER_00: Um some of it's happening in March, so it's in the period.
30:10
SPEAKER_00: It's going to be interesting when we start talking about early April.
30:13
SPEAKER_00: That's technically post the March 31 balance sheet.
30:17
SPEAKER_00: But again, those fair value-based models are based on a marketplace participants' expectation.
30:22
SPEAKER_00: So if the industry analysts or management's already anticipating that these tariffs are going to impact them, they are going to have an impact on their cash flows.
30:33
SPEAKER_00: Q1 is really the point at which you're going to need to make that interim impairment assessment, you know, if in fact you're you have a risk of an impairment, even if the tariffs maybe haven't formally been imposed until after the balance sheet date.
30:46
SPEAKER_02: Aaron Powell One of the things on that piece is that what we anticipate April 2nd is not like the light switch to go on and saying they're effective.
30:53
SPEAKER_02: There's usually a, oh, in 30 days is when they're going to go into effect, which allows the opportunity for negotiations and other things to happen.
31:02
SPEAKER_02: So I'm assuming that's going to be something that's going to need to be factored in as well.
31:05
SPEAKER_02: Aaron Powell Right.
31:06
SPEAKER_00: And that just sort of adds to the challenge, right?
31:08
SPEAKER_00: Because you can't say, oh, well, it's not implemented yet, so I can ignore it.
31:13
SPEAKER_00: I've got to make some judgment about the likelihood of what actually will come to fruition.
31:18
SPEAKER_00: So this, I mean, again, if you have significant exposure to these tariffs and it's going to have a potentially significant impact on your business, it's potentially going to be very challenging to get through the Q1 reporting cycle or thereafter as this landscape continues to evolve.
31:35
SPEAKER_03: So then, but Pat, then how about from a contract perspective?
31:38
SPEAKER_03: Because I would assume a lot of this is going to depend on contract terms, but how do you think about that?
31:43
SPEAKER_00: Yeah.
31:43
SPEAKER_00: So if you have a contractual provision that entitles you to basically sort of pass through the cost of the tariffs, um, then you'd evaluate that kind of like variable consideration under 606.
31:55
SPEAKER_00: Um, that's the revenue accounting standard.
31:58
SPEAKER_00: Um and that's relatively straightforward.
32:01
SPEAKER_00: You'd assume, okay, the if the tariff increases, I have sort of an ability to pass that through, depending on whether I've got a long-term contract that I'm recognizing revenue over time, or I'm just selling goods individually, that will drive sort of the timing of how I recognize that price increase.
32:17
SPEAKER_00: But we have a framework for it, it shouldn't be that difficult.
32:21
SPEAKER_00: If we have to renegotiate the contracts and attempt to increase the price to recover that, well, similarly, we do have a framework for contract modifications.
32:31
SPEAKER_00: And for the most part, if you just have a change in price of the contract, again, it depends on the nature of the arrangement.
32:39
SPEAKER_00: If it's an overtime arrangement where you've got a single performance obligation, you'd have sort of a cumulative catch-up for the expectation of increased revenue.
32:48
SPEAKER_00: If it's just sales of distinct goods and services and the future price is going to go up, that will just be prospective for those future sales of goods.
32:58
SPEAKER_00: So again, more dependent upon the existing contracts and/or what you're able to renegotiate than necessarily a specific tariff implication.
33:06
SPEAKER_00: Trevor Burrus, Jr.
33:06
SPEAKER_03: Yeah, although it's interesting because then as a customer, you also need to be looking at all these contracts to make sure you understand maybe even if you are not the one who's directly impacted, then you need to understand all these reciprocal tariffs and otherwise that Chris has been talking about, because it could be passed through to you.
33:23
SPEAKER_00: Aaron Powell And are you exposed to it?
33:25
SPEAKER_00: Yes.
33:25
SPEAKER_00: Yeah, as the purchaser.
33:27
SPEAKER_00: The one other thing just that that comes up in the revenue context is there's a uh an option that companies have for certain sales taxes, VAT, where they can exclude them from revenue, essentially just report their revenue net of sales taxes.
33:42
SPEAKER_00: So some have asked whether tariffs are a tax that, you know, if you were able to pass it through, would you sort of report your revenue net of that?
33:49
SPEAKER_00: And I think it's important to reflect on what a tariff is.
33:52
SPEAKER_00: Again, it's it's imposed on the purchaser of the good.
33:56
SPEAKER_00: So by definition, it's not a tax that is imposed on and concurrent with a specific revenue transaction, which is the threshold for that optional uh net presentation.
34:07
SPEAKER_00: So if you're able to recover the tariffs, whether that's contractually specified, whether you put a line item on your invoice that says tariff surcharge, doesn't really matter because at the end of the day, you know, that was sort of your discretion, your ability to recover it.
34:21
SPEAKER_00: That's just additional price to you.
34:23
SPEAKER_00: It's additional revenue.
34:25
SPEAKER_00: Now it helps you recover the cost, so it mitigates the impact on the bottom line, but it could have some impact on metrics, right?
34:31
SPEAKER_00: You're gonna have a lower gross margin percentage, even if the notional amount of margin stays the same.
34:37
SPEAKER_00: So just important to be aware of that as well.
34:40
SPEAKER_00: Aaron Powell All right.
34:40
SPEAKER_03: And you mentioned tax, so I have to ask about income tax.
34:43
SPEAKER_03: So what what implications do we have from an income tax perspective?
34:46
SPEAKER_00: Aaron Powell So it's really just thinking about what implication this is going to have on the actual profitability of any of your taxpaying components in the organization as you're thinking about deferred taxes that exist in those jurisdictions.
35:00
SPEAKER_00: And I guess the important thing to think about here, especially reflecting on some of these structures where they've been sort of put in place to perhaps optimize exposure to income taxes, but now are going to perhaps give greater exposure to tariffs, thinking about those individual jurisdiction impacts for goods going back and forth, even if they're intracony sales, those goods going back and forth are going to have an impact on the profitability of those individual jurisdiction-level taxpaying components that could impact your valuation allowance assessment in those jurisdictions.
35:33
SPEAKER_02: My friends in the transfer pricing community, thank you for bringing out intercompany.
35:37
SPEAKER_02: And being a transfer pricing economist most of my career, um, I will say that when we're doing the impact analyses for companies, most of the impacts are related to related party transactions.
35:49
SPEAKER_02: And when you get into thinking about, well, what can we do, it's thinking about what you can do related to those related party situations first and foremost, because there is some flexibility when you deal with ranges, arm's length ranges, um, what pricing ranges could be, but also the types of charges you brought up earlier, royalties.
36:08
SPEAKER_02: Well, royalties and services are well, at least currently not tariffed.
36:13
SPEAKER_02: So if some companies that might have everything bundled together in a tangible price could unbundle that, those might be some of the solutions companies are thinking about now related to planning that might help lessen the impact because you when you have intercompany situations, you have a little bit more flexibility than you would with third parties.
36:33
SPEAKER_03: All right.
36:33
SPEAKER_03: So a lot to think about there.
36:35
SPEAKER_03: So, Pat, we mentioned disclosure.
36:37
SPEAKER_03: I think you hit some of the highlights, but any other points from a disclosure perspective?
36:41
SPEAKER_00: Aaron Powell I I think it's really just reflecting on the fact that tariffs could have a potentially significant impact to your business.
36:49
SPEAKER_00: That could impact a lot of different elements of the financial statements, um, could impact expectations of future results being perhaps different than past results.
36:59
SPEAKER_00: All those types of things are things that you really should be informing the reader of in your disclosures, whether it's in the financial statements directly as part of the risks and uncertainties disclosure, or in the MDNA as part of your just general discussion of the business and the environment, or maybe in the risk factors section of your SEC filing.
37:21
SPEAKER_00: So any of those places could be in play, but I think just important to do the best you can to inform the reader of the exposure of the company to the tariffs.
37:31
SPEAKER_03: So it's interesting.
37:32
SPEAKER_03: The whole time I've been listening to Pat, I was thinking, in addition to that uncertainty, it seems like for a lot of companies, Chris, they may not even really have focused in on how these all these different potential tariffs could be impacting their business, particularly because as you talked about, some of these may be things have never been uh had tariffs before.
37:54
SPEAKER_03: So as you're talking to companies then about how to manage this, how to strategize for the future, what are some of the things that you're recommending or that you're talking to them about?
38:04
SPEAKER_02: Great question.
38:05
SPEAKER_02: And feel as though that every operating model is case specific.
38:09
SPEAKER_02: But I will say some of the tried and true customs mitigation pieces that have been out there before, if you haven't had a tariff, you haven't had to worry about that.
38:21
SPEAKER_02: But now you might.
38:22
SPEAKER_02: And so we see a lot of companies examining programs.
38:26
SPEAKER_02: I'm sorry, I'm gonna give you some more acronyms.
38:28
SPEAKER_02: So I'll try to define them.
38:29
SPEAKER_02: Yes, define them, please.
38:30
SPEAKER_02: Okay.
38:31
SPEAKER_02: Um I'm gonna give you three.
38:33
SPEAKER_02: The first one is called first sale for export.
38:36
SPEAKER_02: So what that basically means in the retailers uh have been using this for years, is that you're able to use a price one step earlier in the supply chain, the first sale before it gets into your non-U.S.
38:49
SPEAKER_02: exporter that ultimately sells to the U.S., you have the opportunity if you qualify related to the proper documentation to use that price as the importation price that often has a nice reduction in the potential tariff impact.
39:04
SPEAKER_02: And so we have a lot of companies that are looking and saying, where are our hardest impact countries that we might have tariffs from, and how do we maybe implement proactively a first sale program so that we might be able to reduce that impact a step further?
39:18
SPEAKER_02: So that's the first one.
39:19
SPEAKER_02: Did I define it properly there?
39:21
SPEAKER_02: Okay, all right.
39:22
SPEAKER_02: The second one we call OC, origin compliance.
39:26
SPEAKER_02: What that links to is what we heard recently with U.S.MCA.
39:30
SPEAKER_02: There's a key consideration to ensure that the origin of the goods comply with the origin of manufacturing.
39:37
SPEAKER_02: So when products are tariffed, they're tariffed upon importation of the U.S.
39:42
SPEAKER_02: based upon origin, not country of export.
39:45
SPEAKER_02: So if you have a product that is exported from Mexico to the U.S., it doesn't mean that that's tariffed just because it's coming from Mexico.
39:52
SPEAKER_02: The question is, where's the origin?
39:54
SPEAKER_02: And oftentimes products in Mexico are manufactured in Mexico, but they have parts that come from all over the world.
40:00
SPEAKER_02: And that's where it gets, of course, more complicated.
40:03
SPEAKER_02: But companies now are moving towards ensuring that they have good origin compliance related to their products.
40:09
SPEAKER_02: This is something that the auto companies have been all over for years because it's very impactful to their industry.
40:16
SPEAKER_02: This is the next step that companies that currently are not being impacted are quickly examining to make sure that, hey, could we qualify for a U.S.
40:24
SPEAKER_02: MCA for our goods that we didn't really mine before, but we want to make sure our origin compliance is working with that.
40:31
SPEAKER_02: And then the third one deals with FTZs, free trade zones.
40:35
SPEAKER_02: So free trade zones are you have the opportunity of importing goods into the zone, but it's not actually as if you have to pay tariffs on it yet.
40:43
SPEAKER_02: It's like this neutral zone that you have.
40:45
SPEAKER_02: And then once you take it out of the zone, if it's being used for consumption of the U.S., then you pay the tariff on.
40:52
SPEAKER_02: But you also can use a free trade zone to do manufacturing.
40:55
SPEAKER_02: And if you do manufacturing and then you export out of the free trade zone, you don't have tariffs because you're exporting out of the U.S.
41:02
SPEAKER_02: and you have goods coming into the zone.
41:04
SPEAKER_02: These are some of the advantages that you have with some of these different solutions we have in the U.S.
41:09
SPEAKER_02: that companies are examining based upon what may happen to their operating model.
41:14
SPEAKER_03: Well, so Pat, I just keep thinking it's a lot for companies to get on top of before they get to March 31 for disclosure to just understand some of these implications.
41:24
SPEAKER_00: Yeah.
41:24
SPEAKER_00: And I think we would generally say you have to play the hand you're dealt from the accounting perspective, right?
41:31
SPEAKER_00: So it's sort of your current operating footprint.
41:33
SPEAKER_00: I mean, all of these things I think are real and valid business considerations, but if it's going to require quite a bit of work to implement some of those strategies, I don't think they would necessarily be available to you in terms of thinking about how to evaluate the value of your business today.
41:49
SPEAKER_00: They obviously are plans that you may have to mitigate the impact going forward, but you sort of have to deal with the current state of play as you make some of those assessments.
41:59
SPEAKER_03: Yes.
42:00
SPEAKER_03: So it's we start to think about closing.
42:02
SPEAKER_03: And I again, I feel like we've just skimmed the surface.
42:04
SPEAKER_03: So this is an ongoing conversation, clearly.
42:07
SPEAKER_03: But for both of you then, for Chris, uh if people want to learn more and understand some of the analysis your group has done or other information, where would you point them?
42:17
SPEAKER_02: So we have uh a lot of industry analyses on our main pwc.com site that'll go through the impacts, not only from the overall impact on the reciprocal tariffs, but it'll go through um impacts by industry that are being released.
42:31
SPEAKER_02: I think we have seven industries we're going to be uh highlighting and talking about.
42:35
SPEAKER_02: And companies are are looking at this to say, okay, well, I kind of know where I'm at, but this gives me insight on where my competition may be at as well, and helping me think through the different strategies of pricing uh options to think through.
42:50
SPEAKER_02: Um but I think the way I'm taking your question is that's one piece to find more information.
42:56
SPEAKER_02: The other piece of advice I would say, besides you know, making sure you double-check that customs data, is make sure you have a dynamic model that is solid to do calculations as we hear things.
43:08
SPEAKER_02: Because to your point, Pat, when you're talking about what does this mean from inventory forecasting, I'm seeing a lot of folks using models that are not dynamic.
43:16
SPEAKER_02: And they're just like they they are not able to make really solid calculations.
43:21
SPEAKER_02: So find a way to do that because that's going to be key.
43:24
SPEAKER_02: Because it's not going to be as if April comes and like we're done.
43:28
SPEAKER_00: Yeah.
43:29
SPEAKER_00: Yeah.
43:29
SPEAKER_00: And we'll definitely need scenarios uh with different probabilities if we're thinking about some of the fair value models or even the undiscounted cash flow models, right?
43:38
SPEAKER_00: There's different scenarios that need to be probability weighted.
43:40
SPEAKER_03: Absolutely.
43:41
SPEAKER_03: So then, Pat, obviously there's so many accounting implications.
43:45
SPEAKER_03: So, for more information on those, where would you point people?
43:48
SPEAKER_00: So uh as you mentioned, this is March 12th.
43:51
SPEAKER_00: We have an uh publication scheduled to come out later this week that will cover a lot of those at a pretty high level, but sort of points you to the places to think through it more.
44:00
SPEAKER_00: Or I think the reality is it's really figuring out specific to your company what some of these impacts are and then bringing them back to models that should be you know familiar to many.
44:12
SPEAKER_00: So maybe unlike you know the I never had tariffs before, like everybody's had to deal with some of these.
44:17
SPEAKER_00: We just have a new element to introduce into that those models, which I'm not trying to minimize that uh the challenge, but we at least have some familiarity with the models.
44:27
SPEAKER_03: That's helpful.
44:28
SPEAKER_03: So from both of you then, and I'll start with Chris.
44:30
SPEAKER_03: Any final words of wisdom or key takeaways you would give for our audience that is sort of confronting uh what might may be coming?
44:38
SPEAKER_02: Aaron Powell I would say ensure that when a company examines the impact, they do not examine it with just one lens.
44:46
SPEAKER_02: I'm seeing a lot of companies that will say, well, we have our chief of purchasing and they've done the calculations and we know what it is, and and and we're looking at the impact from that lens.
44:55
SPEAKER_02: I I would challenge that to say please also consider the other lenses of tax, of customs, uh, and and also the impacts across the organization together.
45:06
SPEAKER_02: In fact, one of the best practices I like to recommend is kind of put your your tariff team together, but have it be representatives from multiple groups to allow their perspectives to come into play.
45:18
SPEAKER_02: Because when you talk about your scenarios, Pat, and scenario modeling and playbooks, which we get involved in doing, you want to make sure that whatever play you do impose on related to your reactions has been looked at across your organization.
45:32
SPEAKER_03: Yeah, I think that's great advice.
45:34
SPEAKER_03: And I think, Pat, if I try to think through the disclosures, you're gonna need all these other people.
45:38
SPEAKER_03: But how about from your perspective?
45:40
SPEAKER_00: Yeah, well, honestly, I was gonna say pretty much the same thing.
45:43
SPEAKER_00: Like the need.
45:43
SPEAKER_00: I took your notes, by the way, and I just read them.
45:46
SPEAKER_00: Attack this cross-functionally uh is critical.
45:50
SPEAKER_00: I mean, we we have an audience that probably a lot of our listeners are kind of from the finance function.
45:55
SPEAKER_00: This can't be a finance-only challenge, like you're gonna need the operations folks, you're gonna need legal, you're gonna need tax, you're gonna need compliance, right, to to figure all this out.
46:04
SPEAKER_00: And then I think all those people also have a stake in terms of what you are actually saying to your stakeholders, your investors in particular.
46:13
SPEAKER_00: So making sure everybody's comfortable that we're telling the right story, or not the story, but we're we're accurately portraying the circumstances that the company's facing is important.
46:24
SPEAKER_03: Well, and uh it sounds like this is not let's wait and see what happens.
46:28
SPEAKER_03: So, you know, I can't wait to April 1st to start thinking about how what I might need to disclose in IQ, but probably need to get this group together and start thinking about all of this now.
46:38
SPEAKER_03: All right.
46:39
SPEAKER_03: Well, Chris, Pat, it was such a pleasure to talk to you.
46:42
SPEAKER_03: Sounds like I may need to have you guys back on, depending on where this all goes, but really appreciate the insight.
46:47
SPEAKER_03: Thanks for joining me.
46:48
SPEAKER_02: Thank you.
46:48
SPEAKER_02: Thanks.
46:50
SPEAKER_03: That's our show for today.
46:52
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46:55
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46:58
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47:02
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47:12
SPEAKER_03: From Thought Leadership at PwC, I'm Heather Horn.
47:16
SPEAKER_03: Thanks for tuning in.
47:27
SPEAKER_01: PwC refers to the U.S.
47:29
SPEAKER_01: member firm or one of its subsidiaries or affiliates, and they sometimes refer to the PWC network.
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SPEAKER_01: Each member firm is a separate legal entity.
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SPEAKER_01: Please see www.pwc.com slash structure for further details.
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SPEAKER_01: This podcast is for general information purposes only and should not be used as a substitute for consultation with professional advisors, including accountants and lawyers.