Chapter 6 — Significant Expenses and Other Segment Items

6.4 ASU 2023-07 Effective Dates and Transition

ASC 280-10

65-1 The following represents the transition and effective date information related to Accounting Standards Update No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures:

The pending content that links to this paragraph shall be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted.
A public entity shall apply the pending content that links to this paragraph retrospectively to all prior periods presented in the financial statements unless it is impracticable to do so. The segment expense categories and amounts disclosed in prior periods shall be based on the significant segment expense categories identified and disclosed in the period of adoption. If providing the information is impracticable, where the term impracticable has the same meaning as in paragraph 280-10-50-17, a public entity shall disclose that fact and explain why retrospective application is impracticable.

6.4.1 Effective Dates

The amendments in ASU 2023-07 are effective for all entities for fiscal years beginning after December 15, 2023 (e.g., for calendar-year-end 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 (e.g., for calendar-year-end entities, interim periods beginning on January 1, 2025 — i.e., Form 10-Q for the first quarter of 2025). Early adoption is permitted.

6.4.2 Transition

As noted in ASC 280-10-65-1, the enhanced segment disclosure requirements apply “retrospectively to all prior periods presented in the financial statements.” In addition, the significant segment expense and other segment item amounts that are disclosed in prior periods should “be based on the significant segment expense categories identified and disclosed in the period of adoption.”

Upon adoption of ASU 2023-07, entities must provide all the disclosures required by the ASU, not just a portion. Entities that decide to early adopt the ASU’s guidance must adopt it in full.

Connecting the Dots

Registrants are encouraged to consult with their auditors, advisers, and SEC counsel if they intend to disclose additional measures of segment profit or loss when such measures are not determined in accordance with GAAP. In such cases, the SEC staff has also stated that registrants should reach out and discuss their plans with them.

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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.