When Trump Brings Gifts: Accounting for Parcel Politics in Your Year-End Audit
Well, here’s a surprise nobody had on their 2024 audit checklist: President Trump slashing tariffs on small parcels from China and Hong Kong like it’s a pre-holiday flash sale. The move, reducing import taxes from 120% to 54% on packages under $800, has left economists blinking and accountants reaching for their red pens. And the cherry on top? The previously planned $200 charge—set for June 1—is now magically cancelled. For Shein, Temu, and any business riding the e-commerce dragon, this is either a blessing or a cleverly wrapped political curveball.
Reference: https://www.bbc.com/news/articles/c308pg239n1o
So, what happens next in the books of your average importer or online retailer? First stop: cost of goods sold (COGS). Lower tariffs mean lower import costs, which could boost gross margins—unless companies decide to pass savings on to customers to fuel volume. Either way, pricing models just got a shake-up. Logistics players will need to adjust landed cost calculations, while CFOs and tax planners might briefly smile before realizing they have to rebuild half their budget assumptions... again.
From a reporting standpoint, this isn’t just a headline—it’s an event under IAS 10: Events After the Reporting Period. Since the tariff cut was announced after year-end but before financial statements are issued, entities need to determine if it's an adjusting or non-adjusting event. Spoiler alert: most will land on the latter. But that doesn’t mean ignoring it—disclosure might be required, especially if the impact on future margins or inventory valuation is material. Cue: updated MD&A, revised risk factors, and nervous glances toward the audit team.
In short, this isn’t just trade policy—it’s accounting theatre. Auditors must now decipher diplomatic negotiations as part of risk assessment. Is this a gift? A trap? Or just another footnote to stick in the annex with a polite shrug? Either way, welcome to May 2025, where parcel politics might weigh more than your inventory. Happy auditing.
For non-accountants you can visit www.eqcpa.com
Or contract us on info@eqcpa.com
For accountants, by the way we are hiring
Your can drop your CV to careers@eqcpa.com
