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U.S. merger and acquisition activity remains on track to accelerate in 2025, despite signals from the Federal Reserve that it may slow the pace of trimming interest rates next year, according to PwC U.S. Deals Clients and Markets Leader Liz Crego. She said that the Fed's comments do not "materially" impact the Big Four firm's recent prediction that M&A activity will speed up next year due to “declining interest rates, large amounts of dry powder, the need for business model reinvention and shifting regulatory priorities.” The projected surge in M&A deals in 2025 comes after a year of “inconsistent recovery” due in part to uncertainty leading up to the November election, according to PwC’s recent analysis. During the first 11 months of 2024, there were 9,780 deals valued collectively at $1.05tn, up slightly from the same period a year earlier. “While caution over the past year was understandable and consistent with similar election cycles, PwC expects the recovery to pick up now that some sources of uncertainty have been resolved,” the report said.

 

CFO Dive

Seventy-seven percent of chief executives are expecting the global economy to improve in the first half of 2025, according to a survey of more than 300 public-company CEOs by advisory firm Teneo - significantly up from the 45% who made a similar forecast last year. The shift toward a bullish outlook was sharpest among CEOs of the biggest companies, or those with more than $10bn in annual revenue. Other findings include that more than 80% of CEOs expect mergers and acquisitions to pick up in 2025; 45% expect that tougher regulatory oversight and approvals will be a major barrier to M&A in the next year; and 60% expect central banks in their region to raise interest rates in the first six months of 2025. In the U.S., interest-rate futures show markets are pricing in two to three rate cuts next year.

 

Wall Street Journal

Scott Schenkel has been appointed as chief financial officer at Expedia. Schenkel is expected to succeed Julie Whalen on Dec. 30. Expedia said it plans to pay Schenkel an annual base salary of $1m and a signing bonus of $3m on his start date. 

 

Wall Street Journal

Findings from the New York Fed survey and the November BLS CPI report should prompt CFOs to prepare for a cautious consumer spending market. CFO.com reports that with minimal income growth being driven primarily by non-college graduates, CFOs could be required to work closely alongside human resources to develop compensation packages reflecting rising costs for mostly college-educated workers.

 

CFO.com

Coinbase CFO Alesia Haas shared some insight during a fireside chat at the Nasdaq London Investor Conference on Wednesday on the future for the crypto industry. Coinbase believes the incoming pro-crypto U.S. administration will result in regulatory clarity and effective crypto legislation, which will lead to growth in the sector.

 

Fortune

House Republicans’ slimmed-down plan to try to avert a government shutdown was defeated in a hastily called vote Thursday, as several dozen GOP lawmakers joined with Democrats in rejecting the proposal endorsed by President-elect Donald Trump. The package failed by a vote of 174-235 just hours after it was hastily assembled by Republican leaders seeking to comply with Trump's demands. A prior bipartisan deal was scuttled after Trump and the world's richest person Elon Musk came out against it on Wednesday. Government funding is due to expire at midnight, triggering a partial shutdown. Millions of federal and military employees could be hit with paycheck delays, though that depends on how long a shutdown lasts. The IRS says it will furlough more than half of its nearly 90,000 employees if a shutdown happens. National Park Service sites will also be closed. However, entitlements such as Social Security and Medicare have their own funding vehicles that are separate from the appropriations currently in question. The Social Security Administration’s latest contingency plan for a lapse in funding says it will maintain activities “needed to ensure accurate and timely payment of benefits.” Additionally, the U.S. Transportation Security Administration warned that travelers during the busy holiday season could face long lines at airports.

 

AP News

Reuters

Washington Post

Wall Street Journal

The American economy experienced a robust growth rate of 3.1% in the three months to the end of September, driven by strong consumer spending and increased exports, according to the Commerce Department. This marks an acceleration from the previous quarter's 3% growth, with GDP growth exceeding 2% in eight of the last nine quarters. Economists polled by the Wall Street Journal had been expecting a smaller, 2.9% increase. “This week’s data show the economy is set to end 2024 on a solid note, which is fortunate since we’ll have to contend with heightened policy uncertainty and possibly greater challenges in 2025,” commented Nationwide economist Oren Klachkin. “We think the Fed maintains an easing bias, but the bar for rate cuts just got higher.”

 

The Hill

Bloomberg

Wall Street Journal

KPMG has narrowed the gap with its larger rivals in the past year, according to figures posted on Tuesday that showed it had the strongest revenue growth of the Big Four accounting and consulting firms. Annual aggregated revenues across its member firms grew 5.1% to $38.4bn in the 12 months to September 30th 2024. Stripping out the effect of currency fluctuations, the rise was 5.1%, greater than that seen at Deloitte, EY, and PwC. In terms of KPMG's regional growth, the Europe, Middle East and Africa region was up 8%, and 1% in Asia Pacific. In the Americas, revenues grew 4.2% to $15.2bn. Tax and legal services rose 10%, with audit up 6% and advisory 2%. 

 

Accounting Today

Financial Times

International Tax Review

The FASB has issued an invitation to comment, seeking feedback on the potential development of a project focused on accounting for intangible assets. These assets include brand recognition, copyrights, patents, and customer relationships. Currently, U.S. GAAP provides guidance on intangibles, but recognition can vary based on the nature and development stage of the asset. The ITC aims to enhance financial reporting in this area, covering both recognized and unrecognized intangibles. FASB is particularly interested in understanding how to improve accounting practices for acquired and internally developed intangibles. Comments on the ITC are requested by May 30th 2025.

 

Accounting Today

The FASB has introduced a proposed Accounting Standards Update (ASU) aimed at enhancing the financial accounting and disclosure of environmental credits and obligations. This initiative stems from stakeholder feedback indicating that GAAP lacks clear guidance on recognizing and measuring the growing volume of environmental credits driven by government regulations. The proposal outlines requirements for recognition, measurement, presentation, and disclosure for entities involved with environmental credits. Notably, FASB clarified that the ASU focuses solely on financial statement reporting and does not cover tracking actual greenhouse gas emissions. Public comments on Environmental Credits and Environmental Credit Obligations (Topic 818) will be accepted until April 15th 2025.

 

Journal of Accountancy

Walmart says it is likely to miss its 2025 and 2030 targets for reducing greenhouse gas emissions, citing challenges related to energy policy, infrastructure and availability of cost-effective low-carbon technologies. It also said that increased store openings and goods shipments have contributed to the revisions. The retailer  had originally pledged to cut emissions by 35% in 2025 and 65% in 2030. 

 

Financial Times

Reuters

National healthcare spending increased 7.5% year over year in 2023 to $4.867tn, or $14,570 per person, according to data released Wednesday by the Centers for Medicare and Medicaid Services. Spending outpaced U.S. economic growth, rising an inflation-adjusted 4.4%, compared with GDP growth of 2.9%. Spending on retail prescription drugs had the biggest increase, rising 11.4% to $449.7bn after a 7.8% rise in 2022, largely due to the use of weight-loss and diabetes drugs. Spending for hospital care services totaled $1.5 trillion in 2023, rising by 10.4%, the highest growth in nearly three decades. Spending on clinical services increased 7.4%. Just over 92% of Americans were covered by some form of health insurance in 2023, up from a flat 92% in 2022.

 

Reuters

Wall Street Journal

Jobless claim applications in the U.S. decreased by 22,000 to 220,000 in the seven days to December 14th, according to the Labor Department, below the 230,000 expected by economists polled by Reuters. The four-week moving average of new applications rose to 225,000, while continuing claims, reported with a one-week lag, fell by 5,000 to 1.87m. “Elevated continuing jobless claims reflect slowing in the labor market, as laid-off workers face longer stretches of unemployment," commented economist Eliza Winger. The median duration of unemployment reached 10.5 weeks in November, up from nine a year earlier.

 

The Baltimore Sun

Bloomberg

Reuters

CFO.com features a report on the optimum staffing levels for businesses' finance departments. The article advises that "Efforts to harmonize the people and processes in the finance function can meaningfully affect the number of FTEs per $1bn revenue."

 

CFO.com

Specialists working in the compliance sector say that hiring good people is getting tougher, with graduates and early-career professionals gravitating toward roles they perceive as being more glamorous. The median age of compliance professionals was 45.1 years in 2023, the most recent year available, according to the U.S. Bureau of Labor Statistics. Although down from 47.7 in 2022, the field’s median age has been stuck above 45 since 2020. The median age of financial and investment analysts was 39.6 in 2023, by comparison, while the median for marketing managers was 39.7. Compliance workers were even slightly older than accountants, whose median age was 44.9. “You don’t go to school to become a compliance officer,” said John Gilmore, co-founder and managing partner of BarkerGilmore, a boutique executive search firm. There is another complication: Not many early-career workers are cut out for compliance, which requires attributes including the ability to think critically, attention to detail, business knowledge and communication skills. “Typically, those are not skills we see in young professionals,” said Natalia Gindler Corsini, managing director for Prae Venire, a management consulting firm helping companies build or enhance compliance programs. “So they have to start working in other departments and then move to the compliance department when they already have some of those skills prepared."

 

Wall Street Journal

Research by people analytics platform Visier has found that some 64% of employees are avoiding company holiday parties.  With hybrid employees least likely to be interested in company get-togethers, CFO.com notes that "This reflects the growing importance of work-life balance for workers, many of whom are willing to trade socializing with coworkers - and the work culture benefits that come with it - for their well-being and personal relationships."

 

CFO.com