Segment Disclosure Updates – Are You Ready to Adopt?


In November 2023, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU 2023-07) with the goal of enhancing segment disclosures under Topic 280 – Segment Reporting. This Update is applicable for all public entities.

What’s Changing

The amendments in this Update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in this Update:

  1. Require that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss (collectively referred to as the “significant expense principle”).
  1. Require that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition.
  1. Require that a public entity provide all annual disclosures about a reportable segment’s profit or loss and assets currently required by Topic 280 in interim periods.
  1. Clarify that if the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one or more of those additional measures of segment profit.
  1. Require that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.
  1. Require that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this Update and all existing segment disclosures in Topic 280.

The amendments in this Update are 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 should apply the amendments in this Update retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption.

How Centri Can Help

  • Serving as the central point of contact for the working group, ensuring that responsibilities are clearly defined and critical deadlines are met.
  • Reviewing your current system and its capabilities to identify the significant segment expenses to be reported within the appropriate timeframe.
  • Developing/enhancing internal controls over the identification and reporting of the significant segment expenses to be reported in the footnote, as well as developing control activities over how the CODM is using these reported expenses to measure segments’ profit/loss. 
  • Enhancing existing Segment documentation in a memorandum to align with the new ASU, or if one has not been previously prepared, preparing a memorandum of how the Company complies with ASC 280 including the adoption of this Update.
  • Assisting with the preparation of the Segment Footnote and its related required disclosures in the financial statements.

At Centri, our team of technical accounting experts has the knowledge and expertise to help your business navigate the new requirements. Contact us to learn more.

Blake Roberts

Partner | Technical Accounting Practice Leader | CPA

Blake is a Partner at Centri Business Consulting and the leader of the firm’s Technical Accounting Practice. He has more than 18 years of public accounting experience. View Blake Roberts's Full Bio

About Centri Business Consulting, LLC

Centri Business Consulting provides the highest quality advisory consulting services to its clients by being reliable and responsive to their needs. Centri provides companies with the expertise they need to meet their reporting demands. Centri specializes in financial reportinginternal controlstechnical accounting researchvaluationmergers & acquisitions, and tax, CFO and HR advisory services for companies of various sizes and industries. From complex technical accounting transactions to monthly financial reporting, our professionals can offer any organization the specialized expertise and multilayered skillsets to ensure the project is completed timely and accurately.

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