In a statement, FASB Chairman Rich Jones said investors want more detailed information about a company’s expenses, which they deem to be “critically important to understanding a company’s performance, assessing its prospects for future cash flows, and comparing its performance over time and with that of other companies.”
Such feedback prompted FASB to issue this newly proposed standard, which would “require companies to provide more information about specific expenses in the notes to financial statements,” Jones added.
The proposed ASU would require public companies “to provide detailed disclosure of specified categories underlying certain expense captions in interim and annual periods,” FASB stated. “It would provide investors with more detailed information about the types of expenses, including employee compensation, depreciation, amortization, and costs incurred related to inventory and manufacturing activities in income statement expense captions such as cost of sales; selling, general and administrative; and research and development.”
According to FASB, the proposed ASU amendments “do not change or remove existing expense disclosure requirements and do not change requirements for presentation of expenses on the face of the income statement. They would require public companies to include certain existing disclosures in the same tabular format disclosure as the other disaggregation requirements set forth in the proposed ASU.”
FASB will be hosting a public roundtable Dec. 13 to obtain feedback on the proposed ASU. Interested participants should submit a comment letter and register to be considered. “Roundtable participants will be selected to ensure a balance of perspectives from investors, preparers, auditors, and other stakeholders,” FASB said. More details, including registration information, will be announced on FASB’s website. 
Jaclyn Jaeger is a contributing editor at Compliance Chief 360° and a freelance business writer based in Manchester, New Hampshire.