Handbook: Segment reporting
Handbooks | July 2024
Latest edition: Our comprehensive guide to ASC 280 – with analysis, Q&As and examples.
Using Q&As and examples, KPMG provides interpretive guidance on segment reporting post-adoption of ASU 2023-07 (Improvements to reportable segment disclosures). This July 2024 edition incorporates updated guidance and interpretations.
Applicability
Type of entity | Public | Nonpublic |
|---|---|---|
Business entity | Required | Discretionary but encouraged |
Not-for-profit | Discretionary but encouraged | Discretionary but encouraged |
Relevant dates
Effective date | Fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. |
|---|---|
Early adoption | Early adoption is permitted. |
Transition | Retrospectively to all periods presented in the financial statements, unless retrospective application is impracticable. |
FASB improves segment disclosures
Segment reporting has consistently been a hot topic for financial statement preparers, auditors, investors and the SEC ever since the FASB first issued guidance on the subject in 1997. That guidance (codified in ASC 280) is designed to provide financial statement users with granular information through the ‘eyes of management’ about a public entity’s business performance.
Despite the FASB’s efforts, the SEC staff has expressed concerns for several years about a lack of compliance. Specifically, the SEC’s concerns are that too few segments are being disclosed and not all required information about reported segments is being presented.
Accounting Standards Update (ASU) 2023-07 marks a response by the FASB to user requests to improve segment reporting, notably requiring disclosure of significant segment expenses and increasing the frequency of segment reporting to interim periods. Calendar-year entities will begin applying many of its provisions in 2024, with the interim-period provisions taking effect in 2025.
ASC 280 remains challenging to apply because an entity’s internal organizational structure dictates how segment information is compiled and presented.
This Handbook discusses these challenges and explains the principles of ASC 280, as amended by ASU 2023-07, through extensive interpretive guidance, examples and observations.
Report contents
- Scope
- Identify the CODM
- Identify and aggregate operating segments
- Determine reportable segments
- Segment disclosure requirements
- Recasting of previously reported information
- Entity-wide information
- SEC filings: US companies
- SEC filings: non-US companies (FPIs)
- Interaction with other Topics and industry guidance
Download the document:
Segment Reporting post ASU 2023-07
Download PDFExecutive summary
Download PDFSegment Reporting pre ASU 2023-07
Download PDFExplore more
Resource
FASB issues ASU requiring new segment disclosures
The ASU enhances current segment disclosures and requires additional disclosures of significant segment expenses.
Resource
Podcast: Improvements to reportable segment disclosures
We discuss the FASB’s amendment, plus other related hot topics from the 2023 AICPA & CIMA Conference.
Resource
SEC staff clarifies segment reporting disclosures
SEC staff remarks on multiple segment performance measures and elaborates on single reportable segment entities.
Resource
Improvements to reportable segment disclosures
KPMG professionals discuss ASU 2023-07 and the reportable segment disclosure requirements for public entities.
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