1.9 Improvements to Reportable Segment Disclosures Under ASU 2023-07

In November 2023, the FASB issued ASU 2023-07 to improve the information that a public entity discloses about its reportable segments and to address investor requests for more information about reportable segment expenses. The ASU does “not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments.”

The ASU’s amendments are effective for all public entities for fiscal years beginning after December 15, 2023 (i.e., for calendar-year-end public entities, annual periods beginning on January 1, 2024 — i.e., December 31, 2024, Form 10-K), and interim periods within fiscal years beginning after December 15, 2024 (i.e., for calendar-year-end public entities, interim periods beginning on January 1, 2025 — i.e., Form 10-Q for the first quarter of 2025). Early adoption is permitted.

The improvements to segment disclosures apply “retrospectively to all prior periods presented in the financial statements.” The significant segment expense and other segment item amounts “disclosed in prior periods shall be based on the significant segment expense categories identified and disclosed in the period of adoption.”

The table below summarizes the ASU’s main provisions related to reportable segment disclosures.

Change	Overview and When Disclosure Is Required
Significant segment expenses	Public entities are required to disclose significant segment expenses by reportable segment if they are regularly provided to the CODM and included in each reported measure of segment profit or loss. Disclosures are required on both an annual and an interim basis.
Other segment items	Public entities are required to disclose other segment items by reportable segment. Such a disclosure would constitute the difference between reported segment revenues less the significant segment expenses (disclosed) less reported segment profit or loss. Disclosures are required on both an annual and an interim basis.
Interim disclosure changes	All existing annual disclosures about segment profit or loss must be provided on an interim basis in addition to disclosure of significant segment expenses and other segment items as noted above.
Multiple measures of a segment’s profit or loss	Public entities may disclose more than one measure of segment profit or loss used by the CODM, provided that at least one of the reported measures includes the segment profit or loss measure that is most consistent with GAAP measurement principles. Disclosures are required on both an annual and an interim basis.
CODM-related disclosures	Disclosure of the CODM’s title and position is required on an annual basis, as well as an explanation of how the CODM uses the reported measure(s) and other disclosures.
Entities with a single reportable segment	Public entities must apply all of the ASU’s disclosure requirements, as well as all existing segment disclosure and reconciliation requirements in ASC 280, on an annual and interim basis.
Recasting of prior-period segment information to conform to current-period segment information	Recasting is required if segment information regularly provided to the CODM is changed in a manner that causes the identification of significant segment expenses to change.

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This publication provides comprehensive guidance; however, it does not address all possible fact patterns, and the guidance is subject to change. Consult a Deloitte & Touche LLP professional regarding your specific issues and questions.