Chapter 6 — Significant Expenses and Other Segment Items

6.1 Overview of ASU 2023-07

ASU 2023-07 is intended to improve reportable segment disclosure requirements in ASC 280, primarily by requiring entities to provide more disaggregated expense information about their reportable segments. The ASU does not change much of the current segment reporting guidance in ASC 280; for example, it does not change how an entity identifies its CODM and operating segments, aggregates operating segments into reportable segments, and applies the quantitative thresholds to determine its reportable segments.

Key Takeaways

This chapter addresses the incremental disclosures introduced by ASU 2023-07 related to significant segment expenses and other segment items. The ASU requires entities to provide additional disclosure about the following on both an annual and an interim basis:

Significant segment expenses by reportable segment if such expenses are regularly provided to the CODM and included in each reported measure of segment profit or loss (see Section 6.2).
Other segment items by reportable segment. Such amounts would represent the difference between segment revenue and the significant segment expenses for each reported measure of segment profit or loss (see Section 6.3).

Other disclosure requirements introduced by ASU 2023-07 have been noted in Changing Lanes discussions in previous sections of this Roadmap, as follows:

Entities must provide CODM-related disclosures on an annual basis, including disclosure of the CODM’s title and position, as well as an explanation of how the CODM uses the reported measure(s) and other disclosures (see Section 2.3.1).
Entities with a single reportable segment must apply all the ASU’s disclosure requirements as well as all existing segment disclosure and reconciliation requirements in ASC 280 (see Section 4.2.1.1).
Entities may disclose more than one measure of segment profit or loss provided that they disclose the measure that is most consistent with GAAP measurement principles (see Section 4.4.2).
Entities must provide incremental interim disclosure requirements (see Section 4.8).
Entities must recast prior-period segment information for certain changes to significant segment expenses (see Section 4.9).

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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.