FASB Proposes Improvements to Income Statement Disclosures
The Financial Accounting Standards Board (FASB) recently published a proposed Accounting Standards Update (ASU) intended to provide investors with more decision-useful information about a public business entity’s expenses. Stakeholders are encouraged to review and provide comment on the proposal by Oct. 30, 2023.
The proposed ASU would require public companies to provide detailed disclosure of specified categories underlying certain expense captions in interim and annual periods. It would provide investors with more detailed information about the types of expenses, including employee compensation, depreciation, amortization and costs incurred related to inventory and manufacturing activities in income statement expense captions such as cost of sales; selling, general and administrative; and research and development.
The amendments in the proposed ASU do not change or remove existing expense disclosure requirements and do not change requirements for presentation of expenses on the face of the income statement. They would require public companies to include certain existing disclosures in the same tabular format disclosure as the other disaggregation requirements set forth in the proposed ASU.
The FASB will host a public roundtable on Dec. 13, 2023, to obtain additional feedback on the proposed ASU. Details about the roundtable, including registration information for both participants and observers, will be announced on the FASB website.