Year End Considerations Ey 2023

September 21, 2025 lawyer

As 2023 draws to a close, organizations around the world are preparing for critical year-end financial, regulatory, and strategic reviews. Year-end considerations are particularly significant for businesses that must navigate complex compliance, tax, reporting, and operational landscapes. Ernst & Young (EY), one of the world’s leading professional services firms, highlights key areas companies should focus on to ensure a strong finish to the year and a smooth transition into 2024. From financial disclosures to sustainability reporting and tax compliance, the 2023 year-end presents both challenges and opportunities that demand careful planning and execution.

Table of Contents

Financial Reporting Considerations

Accuracy and Transparency in Disclosures

Organizations must ensure that their financial statements accurately reflect their position as of year-end. Key considerations for financial reporting include impairment testing, revenue recognition, lease accounting, and provisions for uncertain liabilities. Changes in market conditions, inflationary pressures, and evolving business models may have a material impact on year-end balances and disclosures.

Evaluate impairment of goodwill, intangible assets, and property based on updated cash flow forecasts
Review revenue contracts for variable consideration and recognition timing
Ensure appropriate treatment of lease modifications under IFRS 16 or ASC 842
Assess contingent liabilities and potential legal exposures

EY recommends early engagement with auditors and finance teams to identify disclosure issues and reduce the risk of surprises during year-end audits.

Fair Value Measurements

Given fluctuating interest rates and market volatility, fair value estimates for financial instruments and investment properties must be scrutinized. EY advises companies to document key assumptions and valuation techniques used in fair value assessments to support transparency and audit readiness.

Tax Strategy and Compliance

Tax Provisioning and Deferred Taxes

As companies prepare their year-end tax provisions, it is important to accurately reflect current and deferred tax positions. EY emphasizes the need to consider changes in tax laws, including new global minimum tax rules under the OECD’s Pillar Two framework, and how these developments affect deferred tax assets and liabilities.

Update deferred tax calculations to reflect tax rate changes or structural shifts
Review utilization of tax losses and carryforwards
Analyze uncertain tax positions and potential reserves

Transfer Pricing and Documentation

Transfer pricing remains a high-risk area for multinational corporations. Year-end adjustments to intercompany transactions must be supported by robust documentation. EY advises that businesses assess their transfer pricing policies in light of economic changes, such as supply chain disruptions or inflation, that may have altered the profitability of legal entities.

Year-End Tax Planning Opportunities

Companies may consider taking advantage of tax-saving strategies before year-end. These might include accelerating deductible expenses, deferring income, or reassessing capital expenditure plans to optimize tax positions. EY professionals recommend revisiting tax strategies to align with business goals and regulatory changes.

Regulatory and ESG Reporting

Environmental, Social, and Governance (ESG) Disclosure

2023 marked a year of increased focus on ESG disclosure and sustainability metrics. New regulations in the European Union, such as the Corporate Sustainability Reporting Directive (CSRD), and growing investor demand for transparency are pushing companies to include non-financial reporting in their year-end considerations.

Identify ESG metrics relevant to your industry and stakeholders
Ensure alignment with global standards such as GRI, SASB, or TCFD
Evaluate climate-related financial risks and disclosures

EY encourages organizations to treat ESG not as a compliance requirement but as a strategic driver of long-term value. Integrating sustainability into corporate reporting reflects better risk management and stakeholder engagement.

Internal Controls and Governance

Effective internal controls are essential for accurate reporting and regulatory compliance. Year-end is a crucial time to test and reinforce control frameworks, especially for companies subject to the Sarbanes-Oxley Act (SOX) or similar requirements.

Conduct year-end walkthroughs and control testing
Update risk assessments to reflect new business risks or processes
Ensure board oversight and management accountability for disclosures

Operational and Strategic Considerations

Workforce and Talent Management

Labor markets remained tight through much of 2023, and year-end planning must address compensation, workforce productivity, and retention strategies. EY highlights the importance of aligning human capital management with overall corporate strategy, especially in a hybrid or remote work environment.

Review year-end bonus and incentive structures
Plan for workforce capacity needs in 2024
Evaluate training and upskilling programs

Technology Investments and Digital Readiness

Technology continues to be a key enabler of growth and resilience. Year-end is an appropriate time to assess the effectiveness of digital tools, cybersecurity infrastructure, and IT investment plans. EY suggests businesses perform a gap analysis to identify areas for improvement in digital transformation strategies.

In addition, data privacy and cybersecurity compliance, especially with evolving global regulations, should be included in year-end governance reviews.

Supply Chain and Inventory Management

Disruptions in global supply chains have prompted many organizations to rethink procurement, logistics, and inventory strategies. Year-end inventory valuations must reflect write-downs, obsolescence, or changes in demand patterns. EY advises careful documentation of inventory reserves and supply chain risks in financial statements.

Outlook and Preparation for 2024

Scenario Planning and Budgeting

Looking ahead, organizations should use year-end insights to inform strategic planning and budgeting for the upcoming year. This includes scenario modeling, cash flow forecasting, and investment prioritization. EY emphasizes the value of flexibility and agility in planning, especially in uncertain macroeconomic environments.

Stakeholder Communication

Clear and consistent communication with stakeholders, including investors, regulators, employees, and customers, is essential. As part of year-end activities, companies should prepare messaging that reflects financial performance, operational challenges, and future outlooks.

Draft management commentary for annual reports
Prepare investor relations updates and earnings guidance
Communicate major strategic shifts or risk factors

Year-end considerations for 2023 are multifaceted and require a cross-functional approach involving finance, tax, legal, human resources, and technology teams. By addressing financial accuracy, regulatory compliance, strategic alignment, and stakeholder expectations, businesses can position themselves for resilience and growth in 2024. The guidance from EY highlights the importance of being proactive, prepared, and precise in closing out the year. With thoughtful planning and execution, organizations can not only meet their obligations but also uncover new opportunities for performance improvement and value creation.