Segment Reporting
Last updated on August 8, 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 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.
The Board discussed comment letter feedback and issues for redeliberations on the proposed Accounting Standards Update, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, and made the following decisions.
Significant Expense Principle (the Principle) Conditions
The Board affirmed the decision to base the principle on the significant segment expenses that are (1) regularly provided to the chief operating decision maker (CODM) and (2) included in the measure of segment profit or loss.
Information That Is Regularly Provided to the CODM
The Board affirmed the decision to base the principle on the segment information regularly provided to the CODM. The Board also decided to emphasize the regularly provided notion more consistently throughout the basis for conclusions of the final Update.
Significance Threshold
The Board affirmed the decision to include the significance threshold as part of the principle and decided to:
Last updated on August 8, 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 *)
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 comment period closed on December 20, 2022.- Download the proposed Accounting Standards Update
- Read the comment letters on 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 26, 2023):
The Board discussed comment letter feedback and issues for redeliberations on the proposed Accounting Standards Update, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, and made the following decisions.
Significant Expense Principle (the Principle) Conditions
The Board affirmed the decision to base the principle on the significant segment expenses that are (1) regularly provided to the chief operating decision maker (CODM) and (2) included in the measure of segment profit or loss.
Information That Is Regularly Provided to the CODM
The Board affirmed the decision to base the principle on the segment information regularly provided to the CODM. The Board also decided to emphasize the regularly provided notion more consistently throughout the basis for conclusions of the final Update.
Significance Threshold
The Board affirmed the decision to include the significance threshold as part of the principle and decided to:
- Require that a public entity consider quantitative and qualitative factors when assessing significance
- Include an adaptation of the language from the basis for conclusions of FASB Statement No. 131, Disclosures about Segments of an Enterprise and Related Information, into the basis for conclusions of the final Update.
Other Segment Items
The Board affirmed the decision to require that a public entity disclose an amount and qualitative description for other segment items for each reportable segment. The Board also affirmed the decision to require that a public entity disclose the nature of the segment expense information that the CODM uses to manage operations if the entity does not disclose expenses under the principle for one or more of its reportable segments.
Corporate Overhead by Segment
The Board decided to include implementation guidance in the final Update to clarify that the principle applies to allocated overhead expenses by segment.
Decision That There Is No Reconciliation Requirement
The Board affirmed that a public entity is not required to disclose a reconciliation of the total of the reportable segment’s amount for each significant expense category to its corresponding consolidated expense amount.
Other Matters Related to the Principle
The Board affirmed the following decisions:
The Board affirmed the following decisions:
The Board decided not to make changes to the scope of public entities that apply Topic 280.
Disclosure of Multiple Measures of a Segment’s Profit or Loss
The Board affirmed the following decisions:
The Board affirmed the decision that the principle and all existing segment disclosure requirements for a reportable segment’s profit or loss and assets are required to be disclosed on an interim and annual basis. The Board emphasized that a public entity is required to provide a reconciliation of segment profit or loss to the consolidated income statement on an interim basis. The Board affirmed that no additional reconciliations would be required on an interim basis.
Recasting of Prior-Period Segment Information to Conform to Current-Period Segment Information
The Board affirmed the following decisions:
Disclosure of Significant Changes in Allocating Expenses to Segments
The Board affirmed the decision to require that a public entity explain the nature of significant changes from prior periods in the expense allocation methods and expense measurement methods used to determine segment profit or loss.
Disclosure of Title and Position of the CODM
The Board affirmed the decision to require that a public entity disclose the title and position of its CODM.
Transition
The Board affirmed the decision to require that a public entity apply the amendments on a retrospective basis, unless impracticable.
Transition Disclosure
The Board decided to not affirm the proposed transition disclosure in the final Update about certain changes to the segment expenses included in the management reports that are regularly provided to the CODM.
Effective Date and Early Adoption
The Board decided the amendments will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Board also decided that early adoption is permitted.
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 and expected benefits of the amendments and that the expected benefits of the amendments would justify the expected costs. The Board directed the staff to draft a final Update for vote by written ballot.
The Board affirmed the decision to require that a public entity disclose an amount and qualitative description for other segment items for each reportable segment. The Board also affirmed the decision to require that a public entity disclose the nature of the segment expense information that the CODM uses to manage operations if the entity does not disclose expenses under the principle for one or more of its reportable segments.
Corporate Overhead by Segment
The Board decided to include implementation guidance in the final Update to clarify that the principle applies to allocated overhead expenses by segment.
Decision That There Is No Reconciliation Requirement
The Board affirmed that a public entity is not required to disclose a reconciliation of the total of the reportable segment’s amount for each significant expense category to its corresponding consolidated expense amount.
Other Matters Related to the Principle
The Board affirmed the following decisions:
- Require that a public entity disclose interest expense for a financial operation segment when that item represents a significant expense in accordance with the principle
- Retain all existing segment disclosure requirements of both Topic 280 and other GAAP Topics
- Require that a public entity disclose significant expense categories and amounts that are easily computable from the management reports that are regularly provided to the CODM and include implementation guidance on the easily computable concept.
The Board affirmed the following decisions:
- The current and proposed segment disclosure requirements apply to all public entities, including those public entities that have a single reportable segment.
- Include implementation guidance on the disclosed measure of profit or loss for a public entity reporting as a single reportable segment entity.
- Include implementation guidance on the concept of assessing performance for a public entity with a single reportable segment
- Include an illustrative example of the disclosures for a public entity reporting as a single reportable segment entity
- Include a discussion about cases for which applying the disclosure requirements could result in duplicating information from the primary financial statements within the segment footnote.
The Board decided not to make changes to the scope of public entities that apply Topic 280.
Disclosure of Multiple Measures of a Segment’s Profit or Loss
The Board affirmed the following decisions:
- Allow a public entity to report multiple measures of a segment’s profit or loss that are used by the CODM to allocate resources and assess performance
- Require that the total of the reportable segments’ amount for each measure of segment profit or loss be reconciled in accordance with paragraph 280-10-50-30(d)
- Require that the existing and proposed segment disclosures apply to each reported measure of a segment’s profit or loss
- Not to extend these requirements to other measures that a CODM uses, such as segment assets.
- Include an illustrative example of a public entity that discloses multiple measures of a segment’s profit or loss
- Require that when a public entity discloses additional measures of a segment’s profit or loss, it should disclose those measures for the prior periods in which those measures were regularly provided to the CODM
- Require that a public entity disclose an explanation of how the CODM uses each reported measure of a segment’s profit or loss to allocate resources and assess performance
- Emphasize that a public entity may not disclose a measure of a segment’s profit or loss that is not utilized by the CODM for purposes of allocating resources and assessing performance.
The Board affirmed the decision that the principle and all existing segment disclosure requirements for a reportable segment’s profit or loss and assets are required to be disclosed on an interim and annual basis. The Board emphasized that a public entity is required to provide a reconciliation of segment profit or loss to the consolidated income statement on an interim basis. The Board affirmed that no additional reconciliations would be required on an interim basis.
Recasting of Prior-Period Segment Information to Conform to Current-Period Segment Information
The Board affirmed the following decisions:
- Change the terminology from restatement to recast throughout Topic 280
- Require that a public entity recast segment expense categories and amounts in prior periods when there is a change in the composition of reportable segments in the current period, unless impracticable
- Not to require that a public entity recast segment expense categories and amounts as a result of changes in measurement methods, but state that it is preferable to do so
- Require that a public entity recast the significant segment expense categories and amounts in prior periods when the entity changes its internal reports and the segment expense information that is regularly provided to the CODM in the current period, unless impracticable
- Include discussion in the basis for conclusions for recasting of prior-period information when a segment expense meets or no longer meets significance.
Disclosure of Significant Changes in Allocating Expenses to Segments
The Board affirmed the decision to require that a public entity explain the nature of significant changes from prior periods in the expense allocation methods and expense measurement methods used to determine segment profit or loss.
Disclosure of Title and Position of the CODM
The Board affirmed the decision to require that a public entity disclose the title and position of its CODM.
Transition
The Board affirmed the decision to require that a public entity apply the amendments on a retrospective basis, unless impracticable.
Transition Disclosure
The Board decided to not affirm the proposed transition disclosure in the final Update about certain changes to the segment expenses included in the management reports that are regularly provided to the CODM.
Effective Date and Early Adoption
The Board decided the amendments will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Board also decided that early adoption is permitted.
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 and expected benefits of the amendments and that the expected benefits of the amendments would justify the expected costs. The Board directed the staff to draft a final Update for vote by written ballot.
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.
The following are links to the minutes for each meeting. To view Board meetings and handouts from the past 90 days, click here.
July 26, 2023* | Board Meeting—Discussed comment letter feedback and issues for redeliberations on the proposed Accounting Standards Update. |
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. |
The Board directed the staff to draft a final Accounting Standards Update for vote by written ballot.
Lauren Mottley
Supervising Project Manager
lmottley@fasb.org
Michael Berryman
Practice Fellow
mberryman@fasb.org
Connor Shea
Postgraduate Technical Assistant
cshea@fasb.org
Supervising Project Manager
lmottley@fasb.org
Michael Berryman
Practice Fellow
mberryman@fasb.org
Connor Shea
Postgraduate Technical Assistant
cshea@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.