FASB Holds January 31 Meeting

The Board discussed feedback on its July 2023 proposed Accounting Standards Update Disaggregation of Income Statement Expenses. Specifically, the Board affirmed its proposed disclosure requirements related to the following:

• Disclosure of the “disaggregation of relevant expense captions.”
• Disclosure of “amounts for employee compensation, depreciation, and intangible asset amortization for each relevant expense caption.”
• Integration of “certain existing disclosures with income statement mapping requirements into the same tabular format disclosure as the disaggregation of relevant expense captions.”
• Qualitative description of “the nature of other expenses in a relevant expense caption that are not required to be quantitatively disaggregated.”
• Disclosure of “an amount for total selling expenses, as defined by the entity.”

In addition, the Board affirmed the proposal that only public business entities (PBEs) would be subject to the disclosure requirements and directed the staff to look into whether a scope exception for PBE nonissuers would be feasible.

The Board made tentative decisions related to the following:

• Environmental credit obligation (ECO) liabilities, including recognition, initial and subsequent measurement, derecognition, and interim reporting requirements.
• Balance sheet classification and presentation.
• Classification of cash flows related to environmental credit programs.
• Clarification that environmental credits recognized as assets, as well as ECO liabilities, should not be evaluated under the derivative and hedging guidance in
• ASC 815.
• Prohibiting entities from applying the fair value option in ASC 825 to ECO liabilities.
• Asset recognition.