Objective:

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

Background:

Financial statement users and other allocators of capital have advocated for increased disclosure of information about a public entity’s reportable segments.

The segment reporting guidance has not changed significantly since the issuance of FASB Statement No. 131, Disclosures about Segments of an Enterprise and Related Information, in 1997. While feedback on the 2012 Post-Implementation Review Report on Statement 131 indicated overall support from financial statement users and other investors for the segment reporting guidance, users were interested in exploring ways to require disclosure of additional segment information, including more detailed information about the performance of those segments.

Feedback from the 2016 Invitation to Comment, Agenda Consultation, a 2018 study on the segment aggregation criteria, and a separate 2019 study on the segment disclosure requirements led the Board to focus the project on improvements to the disclosures about a public entity’s significant segment expenses.

Exposure Draft:

On October 6, 2022, the Board issued proposed Accounting Standards Update, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The due date for comment letters is December 20, 2022.

• Download the proposed Accounting Standards Update

• Read the FASB in Focus, which summarizes the proposed Update
• Read the press release on the proposed Update
• Watch a video about the proposed Update

Decisions Reached at Last Meeting (July 27, 2022):

The Board discussed feedback from the external review of the staff draft of the proposed Accounting Standards Update.

The Board also discussed two potential disclosures and a sweep issue that was identified from the external review of the staff draft. The Board made the following decisions:

Title and Position of the Chief Operating Decision Maker (CODM)

The Board decided to require that a public entity disclose the title and position of its CODM.

Disclosure If No Significant Expense Categories and Amounts Are Disclosed

The Board had previously decided to require that a public entity disclose segment expenses under a significant expense principle.

At this meeting, the Board decided that a public entity should disclose the nature of the expense information that the CODM uses to manage operations if the entity does not disclose significant expense categories and amounts under the significant expense principle for one or more of its reportable segments.

Disclosure of Multiple Measures of a Segment’s Profit or Loss

The Board decided to permit a public entity to report multiple measures of a segment’s profit or loss. In those cases, at least one of the reported measures of a segment’s profit or loss should be a measure that management determines in accordance with the measurement principles as the most consistent with those used in measuring the corresponding amounts in the consolidated financial statements. The Board clarified that existing disclosures in paragraphs 280-10-50-22 through 50-24, the proposed significant expense principle, and existing reconciliation requirements in paragraph 280-10-50-30(b) would apply to all disclosed segment measures.

Analysis of Costs and Benefits

The Board concluded that it has received sufficient information and analysis to make an informed decision on the expected costs of the amendments in the proposed Update and that the expected benefits of those amendments would justify the expected costs.

Next Steps

The Board directed the staff to draft a proposed Accounting Standards Update for vote by written ballot.

The Board decided on a 75-day comment period for the proposed Update.

Cumulative Tentative Board Decisions Reached to Date (as of July 27, 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.
 

July 27, 2022	Board Meeting—Discussed feedback from the external review of the staff draft of the proposed Accounting Standards Update, two potential disclosures, and a sweep issue that was identified from the external review of the staff draft.
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.

Stakeholders are asked to review and provide comments on the proposed Update by December 20, 2022.

Lauren Mottley
Supervising Project Manager
lmottley@fasb.org

Michael Berryman
Practice Fellow
mberryman@fasb.org

Sarah Wasikowski
Postgraduate Technical Assistant
swasikowski@fasb.org

Justin Chudzik
Postgraduate Technical Assistant
jchudzik@fasb.org