Disaggregation—Income Statement Expenses

Last updated on January 13, 2023. Please refer to the Current Technical Plan for information about the expected release dates of exposure documents and final standards.

(Sections updated on the date above are indicated with an asterisk *)



The objective of the Disaggregation—Income Statement Expenses (formerly known as the Financial Performance Reporting—Disaggregation of Performance Information) project is to improve the decision usefulness of business entities’ income statements through the disaggregation of certain expense captions.


In February 2022 and July 2022, the Board decided that it would revise the scope and objective of the project to focus on improving the decision usefulness of business entities’ income statements through the disaggregation of any relevant expense line items.

Exposure Draft:

There are no exposure documents at this time.

There are no media releases or educational materials at this time.

Decisions Reached at Last Meeting (January 11, 2023)

The Board continued its initial deliberations by discussing what information entities would be required to provide when disaggregating income statement expenses.

Types of Costs Incurred Provided When Disaggregating Expenses

The Board decided to require that entities disclose (1) costs incurred that are expensed as incurred and (2) costs incurred that are capitalized as inventory (and subject to subsequent measurement requirements in Topic 330, Inventory).

Categories Required—Costs Expensed as Incurred

The Board decided to require that entities disclose the amounts of (1) employee compensation, (2) depreciation of property, plant, and equipment, (3) amortization of intangible assets, and (4) inventory expense included in each relevant expense line item in the income statement. The Board indicated that it will discuss at a future meeting whether other types of depreciation, amortization, or depletion other than depreciation of property, plant, and equipment and amortization of intangible assets should be disclosed.

Categories Required—Costs Capitalized to Inventory

The Board decided that the required categories for the further disaggregation of costs incurred that are capitalized to inventory during the reporting period should be (1) purchases of inventory (which includes all classes of inventory), (2) employee compensation, (3) depreciation of property, plant, and equipment, and (4) intangible asset amortization.

Definition of Employee Compensation

The Board decided that the term employee should be defined consistent with the existing definition in Topic 718, Compensation—Stock Compensation.

The Board decided that the definition of compensation should be as follows:

            At a minimum, all forms of cash consideration (including deferred cash compensation), share-
            based payments, medical care benefits, retirement benefits, and other postemployment
            benefits, given by an entity in exchange for service rendered by employees or for the
            termination of employment. This includes wages, salaries, social security contributions,
            compensated absences, profit-sharing, bonuses, one-time employee termination benefits,
            nonretirement postemployment benefits, and any compensation cost recognized in accordance
            with the guidance in Topic 710, Compensation—General. Other postretirement benefits include
            postemployment life insurance and postemployment medical care. For defined benefit plans
            within the scope of Topic 715, Compensation—Retirement Benefits, employee compensation
            includes only the service cost component.

The Board decided to permit entities that apply the presentation requirements in SEC Regulation S-X, Rule 9-04 to use a definition of employee compensation that is consistent with the existing requirements in Rule 9-04 to present salaries and employee benefits.

Disaggregation of Residual Expenses and Costs Incurred

The Board decided to require that any natural expenses (for example, impairments of fixed assets and amortization of film costs) for which an entity must already disclose the amount and caption in the income statement where the expense is recorded should be included in the same tabular format disclosure as any other disclosures stemming from this project.

The Board decided to require qualitative disclosure about other amounts remaining after breaking out the required categories (noted above) for each relevant income statement caption. This disclosure applies to both costs that are expensed and costs that are capitalized to inventory.

Selling Expenses

The Board decided to require that all business entities disclose selling expenses and provide the accounting policy disclosure in paragraph 235-10-50-1 to describe how the entity has determined what expenses are classified as selling expenses.

Presentation or Disclosure

The Board decided the additional disaggregated information may be disclosed in the notes to financial statements.

Example Expense Disaggregation

To assist stakeholders in understanding the Board’s tentative decisions, the FASB staff has included an example income statement with accompanying footnote disclosures that demonstrates the main types of disaggregation that would be required based on the tentative Board decisions made to date in the Disaggregation—Income Statement Expenses project. The example below represents one potential disclosure format, and the required information is subject to change pending future tentative Board decisions.

Assume an entity produces the following income statement under current GAAP:


Example of potential new disclosures:


Cumulative Tentative Board Decisions Reached to Date (since February 16, 2022)

A summary of the Board’s tentative decisions reached since February 16, 2022 can be found here.

Reached Before the Scope and Objective Revision (before February 16, 2022)

A summary of the Board’s tentative decisions reached before February 16, 2022 can be found here.

The Board meeting minutes, handouts, and videos 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.

The following are links to the minutes for each meeting. To view Board meetings and handouts from the past 90 days, click here.
January 11, 2023* Board MeetingThe Board discussed what information entities would be required to provide when disaggregating income statement expenses.
October 5, 2022 Board MeetingThe Board refined the project’s scope and decided to continue focusing on expense disaggregation.
July 27, 2022 Board MeetingThe Board discussed the feedback received through various outreach efforts and the project’s next steps.
February 16, 2022 Board MeetingThe Board revised the scope and objective of the project.

See below for decisions made before the revision of the scope and objective of the project.
December 11, 2019 Board MeetingDiscussed feedback received from stakeholder outreach on the internal view approach to disaggregation and the path forward for the project.
April 24, 2019 Board MeetingDiscussed an internal view approach to disaggregating expense information and related alternatives.
December 19, 2018 Board MeetingDiscussed the feedback received during outreach with entities on their system capabilities to disaggregate income statement line items.
March 28, 2018 Board Meeting—Discussed the staff’s suggested terminology to describe the lines from the income statement to be the focus of the disaggregation.
December 13, 2017 Board Meeting—Discussed the project plan and research relating to the presentation and disaggregation of functional and natural information in the performance statements of private companies.
September 20, 2017 Board Meeting—Added a project on the disaggregation of performance information to the technical agenda. The Board decided to retain the issue of structuring the performance statement by developing an operating performance measure on the research agenda.

The Board directed the staff to perform additional research and analysis on the follow-on issues discussed at the January 2023 Board meeting as well as application to private companies, transition requirements, interim requirements, cost-benefit considerations, comment period, and consequential amendments.

Mary Mazzella
Assistant Director
Chris Bohdan
Project Manager
Michael Lupo
Project Manager

Julie Um
Project Manager

Gary Sardo
FASB Practice Fellow

Justin Chudzik
Postgraduate Technical Assistant

Josh Costo
Postgraduate Technical Assistant

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