Defining Issues | August 2023
The proposed ASU addresses investor requests for more decision-useful information. Any relevant expense caption would be disaggregated in a tabular disclosure in the notes to the financial statements. If applicable, further disaggregation of inventory and manufacturing expense would be required.
Applicability
- Annual and interim financial statements of public business entities
Relevant dates
- July 31, 2023 – FASB proposed ASU
- October 30, 2023 – Comments due
Key impacts
Proposed quantitative disclosures
Disaggregate every relevant expense caption into:
- employee compensation
- depreciation
- intangible asset amortization
- depreciation, depletion and amortization (DD&A)
- inventory and manufacturing expense
Further disaggregate inventory and manufacturing expense, if applicable, into:
- purchases of inventory
- employee compensation
- depreciation
- intangible asset amortization
- DD&A
State the total amount of selling expenses
Proposed qualitative disclosures
- Describe the nature of amounts not separately disaggregated in relevant expense captions
- Describe the nature of amounts not separately disaggregated in inventory and manufacturing expense and other adjustments and reconciling items
- Provide the entity's definition of other manufacturing expenses
- Provide the entity’s definition of selling expenses
Report contents
- Source and applicability
- Fast facts, impacts, and actions
- Background
- Proposed disclosures
- Illustrative example
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