A PDF version of the full publication is attached here: Don't roll the DISE on the FASB's expense disaggregation project (PDF 335kb)

The need for additional disaggregated financial information was a resounding theme from investors weighing in on the FASB’s 2021 agenda consultation process. Today, there is little guidance on the expense categories that should be presented in a company’s income statement, unless otherwise prescribed by SEC guidance or industry-specific rules. Investors have consistently asked for additional details about income statement expenses, which they believe are important to understanding a company’s performance and forecasting future cash flows.

In response to this feedback, the FASB issued an exposure draft ¹ on July 31, 2023 that would require additional disaggregation of income statement expenses (referred to as DISE). The scope and impact of the proposed amendments are far reaching. The proposal would not change or add to the expense captions a company currently presents in its income statement. However, it would require new tabular footnote disclosures that provide additional detail about the amounts included in existing expense captions. The proposed amendments would also require the separate disclosure of selling expenses.

The FASB designed the proposed amendments to be industry-agnostic by focusing on specific categories of expenses likely to be relevant for most companies, including employee compensation, depreciation, and amortization expense. The categories are also among those identified as the highest priority in investor feedback to the FASB and generally align with the expense categories that would be required by the new International Accounting Standards Board (IASB) standard on primary financial statements, expected to be issued in 2024.