The Financial Accounting Standards Board (FASB) has issued a clarification regarding the interim effective date for non-calendar year-end entities in its latest Accounting Standards Update (ASU 2024-03). The update focuses on Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40).
Key Details:
- Annual Reporting Periods: Public business entities must adopt the guidance for periods beginning after December 15, 2026.
- Interim Reporting Periods: Effective for periods within annual reporting beginning after December 15, 2027.
- Early Adoption: Permitted for entities ready to implement the standard.
The ASU aims to enhance clarity and consistency in financial reporting by improving the disaggregation of income statement expenses. This step aligns with FASB’s commitment to providing stakeholders with actionable insights into financial performance.
Background:
This update is part of FASB’s broader initiative to improve transparency in financial reporting by addressing stakeholder concerns about current income statement disclosures.