We recently updated our Financial Reporting Insights on the Financial Accounting Standards Board’s Accounting Standards Update (ASU) 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03). Under ASU 2024-03, public business entities (PBEs) are required to disclose disaggregated information about certain costs and expenses in the notes to their financial statements in both annual and interim filings. The ASU will likely require most PBEs to provide more detailed disclosures regarding the components of these costs and expenses than what is currently disclosed. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted.
The updated Financial Reporting Insights provides an overview of the new expense disaggregation disclosure requirements, including illustrative examples, and certain items to keep in mind for 2025 reporting and beyond. The paper includes additional illustrative examples and provides further details and commentary on the new requirements and implementation considerations. It also highlights significant differences between the ASU and the applicable disclosure requirements under International Financial Reporting Standard 18, Presentation and Disclosure in Financial Statements.
