On July 31st, the Financial Accounting Standards Board (FASB) released a proposed Accounting Standards Update (ASU) that would require public companies to provide disclosures in financial statements about that company’s expenses that would help investors make informed decisions concerning investments. Investors benefit greatly by understanding a company’s performance, assessing a company’s prospects for future cash flows, and having the ability both to observe a company’s performance over time and to compare with that of other companies.
The proposed ASU would require public companies to:
provide detailed disclosure of specified categories underlying certain expense captions in interim and annual periods
provide investors with more information about the types of expenses, such as employee compensation, depreciation, and amortization
include certain existing disclosures in the same tabular format disclosure as the other disaggregation requirements set forth in the proposed ASU
The amendments in the proposed ASU do not change or remove existing expense disclosure requirements, nor do they change requirements for presentation of expenses on the face of the income statement.
Additionally, the FASB will host a public roundtable on December 13, 2023 to collect additional feedback on the proposed ASU. Supplemental details about the roundtable, including registration information, will be announced on the FASB website.