Tentative Board Decisions

Tentative Board decisions are provided for those interested in following the Board’s deliberations. All of the reported decisions are tentative and may be changed at future Board meetings.

Wednesday, March 10, 2021 FASB Board Meeting

Segment reporting. The Board continued its deliberations of a principle-based disclosure requirement to report the significant segment expenses that are both (1) regularly provided to the chief operating decision maker (CODM) and (2) included in the reported measure of segment profit or loss.

The Board made the following additional decisions related to the principle.   

Reconciliation Requirement

The Board discussed whether the current reconciliation requirements in Topic 280, Segment Reporting, also should apply to the significant expenses disclosed under the principle.   

The Board decided that each significant expense category disclosed under the principle should be reconciled to its corresponding consolidated amount.

 
Interaction with Existing Expense Disclosures by Reportable Segment

The Board discussed the interaction between the significant expenses disclosed under the principle and the segment expenses currently required to be disclosed under Topic 280, specifically, (1) interest expense, (2) depreciation, depletion, and amortization expense, (3) income tax expense, and (4) significant noncash items other than depreciation, depletion, and amortization expense. 

The Board decided to retain the current expense disclosures in Topic 280 and that a public entity would be additionally required to comply with the principle.  

 
Disclosure of Total Expenses and Other Expenses by Reportable Segment 

The Board decided that a public entity would be required to disclose the following information by reportable segment irrespective of whether the CODM is regularly provided with this information:
  1. An amount for other items that is the difference between segment revenue less the significant expenses disclosed under the principle and the segment profit or loss measure
  2. A description of the composition of other items.
Other items may include (1) insignificant expenses and the remaining expenses included in the reported measure of segment profit or loss that are not separately disclosed under the principle and (2) gains and losses that also are included in the measure of segment profit or loss.

A public entity would not be required to reconcile the amount for other items to a corresponding consolidated amount.
 

Description of the Basis for Allocating Expenses to the Segments

The Board discussed whether to require a public entity to describe the basis for allocating expenses to its segments.

The Board decided to amend existing guidance in Topic 280 to require a public entity to disclose the nature of any substantial change in expense allocation methods from prior periods that are used to determine the measure of segment profit or loss and the effect, if any, of those changes on the measure of segment profit or loss.
 

Easily Derivable Notion

The Board discussed developing a requirement that would include within the scope of the principle segment expenses that can be easily derived from information regularly provided to the CODM. For example, segment expenses may be regularly provided to the CODM as a percentage of segment revenue rather than as absolute amounts.

The Board directed the staff to perform additional outreach on the drafting and scope of the easily derivable notion for future consideration by the Board.