PROJECT UPDATE

Segment Reporting

Last updated on October 9, 2017. Please refer to the Current Technical Plan for information about the expected release dates of exposure documents and final standards.

(Updated sections are indicated with an asterisk *)


The staff has prepared this summary of Board decisions for information purposes only. Those Board decisions are tentative and do not change current accounting. Official positions of the FASB are determined only after extensive due process and deliberations.

*Project Objective
*Due Process Documents
*Decisions Reached at the Last Meeting
*Tentative Board Decisions Reached to Date
*Next Steps
*Board/Other Public Meeting Dates
*Background Information
*Contact Information

*Project Objective

The objective of this project is to undertake improvements to the segment aggregation criteria and disclosures to provide users with more decision-useful information about the reportable segments of a public entity.

*Due Process Documents

No due process documents have been issued.

*Decisions Reached at the Last Meeting (September 20, 2017)

The Board decided to add a project to the technical agenda on segment reporting that will focus on improvements to the segment aggregation criteria and disclosure requirements.

Segment Aggregation criteria

For segment aggregation criteria, the Board decided it could:
  1. Move the reportable segment thresholds to form part of the aggregation guidance, that is, develop a brightline threshold for aggregation.
  2. Remove the aggregation criteria, but retain the practical limit guidance.
The Board directed the staff to perform additional outreach with smaller and middle size public companies to understand the effect of pursing the above alternatives.

Segment Disclosure Requirements

For segment disclosure requirements, three alternatives were considered. The Board could:
  1. Add individual pieces of segment information to the list of requirement disclosures.
  2. Require the disclosures in Topic 280, Segment Reporting, to be reported in a table.
  3. Require a table of regularly reviewed information based on how it relates to the lines in the financial statements.
Board members expressed a preference for alternatives (1) and (2) but asked the staff to perform additional research to understand the cost of implementing all of those approaches.

*Tentative Board Decisions Reached to Date

See Decisions Reached at Last Meeting.

*Next Steps

The staff will develop a project plan that incorporates the Board’s feedback and considers the next steps.

*Board/Other Public Meeting Dates

The Board meeting minutes are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final standard.

*September 20, 2017 Board Meeting—Project was added to the Technical Agenda.

*Background Information

In August 2016, the Board issued an Invitation to Comment (ITC), Agenda Consultation, to solicit feedback about the major financial reporting issues that the FASB should consider in its future technical agenda. Many respondents to the ITC commented that a fundamental reconsideration of Topic 280, Segment Reporting, was not needed; however, targeted improvements were warranted to the segment aggregation criteria and the disclosure requirements to remove cost from the financial reporting system and to provide users with more decision-useful information.

In May 2017, the Board discussed potential ways to improve the segment aggregation criteria and disclosure requirements and directed the staff to perform outreach with users, preparers, and accounting firms to assess the effect and viability of potential alternatives.

In September 2017, the Board considered a summary of the outreach and decided to add a project on segment reporting to the technical agenda.

*Contact Information

Lauren Mottley
Project Manager
lmottley@fasb.org

Andy Bologna
Practice Fellow
abologna@fasb.org

Andrew Debbink
Postgraduate Technical Assistant
adebbink@fasb.org

Carly Lapins
Postgraduate Technical Assistant
clapins@fasb.org