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- On Oct. 6, 2022, the Financial Accounting Standards Board (FASB) issued Proposed Accounting Standards Update (ASU), “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which would require public entities to disclose more information about a reportable segment’s significant expenses on an interim and annual basis.
- Significant expense categories and amounts subject to disclosure would be derived from expenses that are 1) regularly reported to an entity’s chief operating decision-maker (CODM) and 2) included in a segment’s reported measure of profit or loss. The proposal, however, does not establish a level for assessing the significance of each expense category in that population of expenses.
- Public entities also would be required to disclose an amount for “other segment items,” representing the difference between 1) segment revenue less significant segment expenses and 2) the reportable segment’s profit or loss measure. A description of the composition of the “other segment items” would be required.
- The proposal would require public entities to provide at each interim period certain segment-related disclosures that are now required only on an annual basis. Public entities also would be required to disclose the name and title of the CODM.
- The proposed changes to the segment reporting guidance would apply retrospectively.
- Comments on the proposal are due by Dec. 20, 2022.