PROJECT UPDATE

Segment Reporting

Last updated on April 18, 2022. 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 *)

 

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.
 

Background:

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 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.

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 (April 6, 2022):


The Board discussed two issues that arose during the drafting of the proposed Accounting Standards Update based on the Board’s tentative decisions to require a significant expense principle. The principle would require that a public entity disclose the significant expense categories and amounts that are both (1) regularly provided to the chief operating decision maker (CODM) and (2) included in each reported measure of segment profit or loss.

The Board made the following decisions.

Applying the Significant Expense Principle to Gross Interest Expense for Financial Operations Segments

Topic 280, Segment Reporting, currently allows a public entity to disclose only net interest revenue for a financial operations segment when a majority of the segment’s revenues are from interest and the CODM primarily relies upon net interest revenue to assess segment performance. The Board decided that the proposed Update would require a financial operations segment that discloses net interest revenue to also disclose gross interest expense if that information meets the requirements for disclosure under the significant expense principle.

Reconciliation of Significant Segment Expenses to Consolidated Expense Amounts

The Board decided not to require the total of the reportable segments’ amount for each significant expense category disclosed under the principle to be reconciled to its corresponding consolidated amount.

Other

The Board also discussed the feedback received specific to the segment reporting project through the 2021 Invitation to Comment, Agenda Consultation.

Cumulative Tentative Board Decisions Reached to Date (as of April 6, 2022):


A summary of decisions reached to date 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.
 
April 6, 2022*
Board Meeting—Discussed issues that arose during the drafting of the proposed Accounting Standards Update based on the Board’s tentative decisions to require a significant expense principle.
December 8, 2021  Board Meeting—Discussed issues related to the significant segment expenses proposal and the project’s next steps.
October 13, 2021 Board Meeting—Discussed issues related to the significant segment expenses proposal and the plan to complete initial deliberations.
May 12, 2021 Board Meeting—Discussed issues related to the significant segment expenses proposal.
March 10, 2021 Board Meeting—Discussed issues related to the significant segment expenses proposal.
January 20, 2021 Board Meeting—Discussed issues related to the significant segment expenses proposal.
October 7, 2020 Board Meeting—Discussed the significant expenses proposal and next steps for the project.
July 15, 2020 Board Meeting—Discussed the investor feedback summary and the plan for deliberations.
December 11, 2019 Board Meeting—Discussed the preparer feedback received from the 2019 disclosure study and next steps for the project.
May 29, 2019 Board Meeting—As part of developing the topics for a study on segment disclosures, the Board will discuss an analysis of options to both require segment information be reported in a financial statement format and to require additional general disclosure requirements in Topic 280, Segment Reporting.
April 10, 2019 Board Meeting—Discussed an analysis of options to both expand the list of required segment disclosures in Topic 280, Segment Reporting, and to require that the disclosures in Topic 280 be reported in a tabular format.
February 13, 2019 Board Meeting Discussed an analysis of options to potentially improve how the management approach applies to the segment disclosure requirements. 
December 19, 2018 Board Meeting—Discussed the feedback received on the 2018 segment aggregation study.
June 13, 2018 Board Meeting—Discussed a plan to undertake extended outreach that considers improvements to the aggregation criteria and the reportable segments process.
February 7, 2018 Board Meeting—Discussed potentially reordering the reportable segments process and moving the size tests earlier within that process.
December 13, 2017 Board Meeting—Discussed the project plan and additional research requests.
September 20, 2017 Board Meeting—Project was added to the Technical Agenda.

The Board directed the project team to prepare a staff draft of a proposed Accounting Standards Update for external review.

Lauren Mottley
Supervising Project Manager
lmottley@fasb.org

Sally Bishop
Practice Fellow
sbishop@fasb.org

Reagan Snyder
Postgraduate Technical Assistant
rsnyder@fasb.org

Sarah Wasikowski
Postgraduate Technical Assistant
swasikowski@fasb.org

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.
 

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