FASB Holds May 8 Meeting

At its May 8, 2024, meeting, the FASB discussed its projects on (1) disaggregation of income statement expenses, (2) postimplementation review of the Board’s standard on revenue from contracts with customers (ASC 606), and (3) the proposed measurement chapter of the Board’s conceptual framework.

The Board continued redeliberating its proposed Accounting Standards Update (ASU) Disaggregation of Income Statement Expenses. Tentative decisions reached by the Board on this topic included the following:

• Entities would be allowed to “(1) disclose an aggregate reimbursement amount that is either received or paid as a separate line item in the tabular format disclosure or (2) map the reimbursement amount to the required expense categories.” Further, entities would be required to disclose “a qualitative description of the natural expense categories to which the reimbursement relates.”
• No practical expedient would be provided regarding combining “cost of product revenue and cost of service revenue into one expense caption for the purpose of applying the disaggregation requirements.”
• “Inventory and manufacturing expense” would be removed from, and “purchases of inventory” would be added to, required expense categories (i.e., a “single-level disaggregation approach”).
• An “example income statement and accompanying footnote disclosure” would be provided to illustrate the disaggregation requirements related to the cost of products sold.

For more information, see the tentative Board decisions on the FASB’s Web site.

The Board discussed postimplementation review activities related to ASC 606 (on revenue from contracts with customers) that have occurred since September 2022. No decisions on this topic were made at the meeting, but the Board asked the staff to continue monitoring the implementation of the revenue standard.

For more information, see the tentative Board decisions on the FASB’s Web site.

The Board discussed feedback on the proposed measurement chapter of its conceptual framework project, affirming a few of its tentative decisions. In addition, the Board directed the staff to draft a final version of the chapter for a vote by written ballot.

For more information, see the tentative Board decisions on the FASB’s Web site.