New white paper on segment reporting
Our white paper, Expanded Reportable Segment Disclosures, explains the requirements of Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which was issued by the Financial Accounting Standards Board in November 2023 to improve disclosures about a public entity’s reportable segments and provide additional information about a reportable segment’s expenses. The primary change in ASU 2023-07 is the introduction of the significant expense principle, which requires disclosure of segment expense categories and amounts that meet all of the following criteria:
- Regularly provided to the chief operating decision maker
- Included within the segment’s report measure of profit or loss, and
- Determined to be significant by management
Other than the significant expense principle, ASU 2023-07 includes the following incremental changes to the existing guidance in Topic 280:
- Introduces the other segment items disclosure
- Permits disclosure of multiple measures of a segment’s profit or loss
- Clarifies the scope of Topic 280 for single reportable segment entities
- Expands interim disclosures
Our white paper further discusses the requirements of ASU 2023-07, including considerations on how to apply them, their interaction with the existing requirements in Topic 280, and an example illustrating the reportable segments note disclosure after adoption of the ASU. Additionally, the white paper briefly highlights the other requirements of Topic 280 that were not affected by ASU 2023-07.