Fasb expense recognition11/6/2023 ![]() The Board decided to require all disclosures for interim reporting periods.Įntities Subject to Disaggregation Requirements The Board decided to add depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities in accordance with Subtopic 932-360, Extractive Activities-Oil and Gas-Property, Plant, and Equipment, as a separate category. The Board clarified that amortization of a finance lease right-of-use asset recognized in accordance with paragraphs 842-20-35-7 through 35-8 and amortization of leasehold improvements recognized in accordance with paragraphs 842-20-35-12 through 35-13 should be included as part of either the depreciation required category or the amortization required category. The Board decided to link depreciation and amortization to existing disclosure requirements in paragraph 360-10-50-1 and paragraph 350-30-50-2. Other Amortization, Depreciation, and Depletion The Board decided to require that a specific list of natural expenses that are (1) already required to be disclosed in total, (2) included in only one expense caption that is also a relevant expense caption, and (3) not subject to a mapping requirement be included in the same tabular format disclosure as any other expense disaggregation requirements resulting from this project. Requirement to Disclose Natural Expenses Included in One Caption without a Mapping Requirement The Board decided that the selling expenses disclosure requirement would apply only to entities within the scope of this project. ![]() The Board revised the required category from “inventory expense” to “inventory expense and other manufacturing expenses.”Īpplication of Selling Expenses Disclosure to Nonbusiness Entities The Board clarified that manufacturing expenses should not be separated from costs capitalized to inventory when they are of the same category (for example, employee compensation). The Board also discussed whether to proceed to drafting a proposed Accounting Standards Update for vote by written ballot. The Board continued its initial deliberations by discussing clarifications of the decisions at the JanuBoard meeting, interim reporting, application to private companies, transition, cost-benefit considerations, and comment period. In response to that feedback, beginning in February 2022, the Board revised the scope and objective of this project to improve the decision usefulness of expense information on public business entities’ income statements through the disaggregation of relevant expense captions.ĭecisions Reached at Last Meeting (March 29, 2023) ![]() Investors specifically indicated that more granular information about cost of sales and selling, general, and administrative expenses would assist them in better understanding an entity’s cost structure and forecasting future cash flows. The objective of this project is to improve the disclosures about a public business entity’s expenses by providing more detailed information about certain types of expenses (such as employee compensation) that are included in expense captions commonly presented on the income statement (such as cost of sales).įeedback from investors, lenders, creditors, and other allocators of capital (collectively, “investors”) on the 2021 Invitation to Comment, Agenda Consultation, indicated that more detailed information about expenses is critically important in understanding an entity’s performance, assessing an entity’s prospects for future cash flows, and comparing an entity’s performance both over time and with that of other entities.
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