Why Is the FASB Issuing This Accounting Standards Update (ASU)?

On January 6, 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date to clarify the effective date for ASU 2024-03, Interim Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses for non-calendar year end entities.  ASU 2024-03 states that the amendments are effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.  After its issuance, the Board was asked to clarify the initial effective dates for non-calendar year end entities because of how the guidance was written they may have concluded that they would be required to initially adopt the disclosure requirements in ASU  2024-03 in an interim reporting period, rather than in an annual reporting period.

What Are the Main Provisions?

This ASU amends the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.  Early adoption of Update 2024-03 is permitted.

Who Is Affected by the Amendments in This ASU?

The amendments in this ASU affects public business entities with non-calendar year-ends.

Read full ASU here:  ASU 2025-01