(P) December 16, 2026; (N) December 16, 2026
220-40-65-1The objective of the disclosure requirements in this Section is to provide disaggregated information about a public business entity’s expenses to help investors: - a
Better understand the entity’s performance
- b
Better assess the entity’s prospects for future cash flows
- c
Compare an entity’s performance over time and with that of other entities.
In addition, the disclosure requirements are intended to provide information about the relative proportion and trends of each category of expense identified in paragraph 220-40-50-6 in relation to the corresponding income statement expense caption amount in order to meet the overall objective described above. An entity shall consider the level of detail necessary to satisfy the disclosure objective and specific requirements of this Subtopic. An entity may use estimates or other methods that produce a reasonable approximation of the amounts required to be disclosed by this Subtopic.(P) December 16, 2026; (N) December 16, 2026
220-40-65-1This Section includes the following (all of which apply only to expenses in continuing operations):- a
Required expense categories to be disclosed, identification of relevant expense captions, and practical expedients (see paragraphs ) - b
Tabular integration of other disclosure requirements (see paragraphs ) - c
Disclosure of expense reimbursements included in a relevant expense caption (see paragraphs ) - d
An amount and qualitative description of the composition of other items remaining in relevant expense captions (see paragraph 220-40-50-30) - e
Disclosure of the disaggregation of relevant expense captions that contain amounts within the scope of Topic 330 on inventory (see paragraphs ) - f
Requirements related to selling expenses (see paragraphs ).
(P) December 16, 2026; (N) December 16, 2026
220-40-65-1The requirements in this Section apply to interim and annual reporting periods, except for the requirement to disclose how an entity defines selling expenses (see paragraph 220-40-50-36), which only applies to annual reporting periods (or interim reporting periods if the definition is changed). An entity is required to include the disclosures listed in paragraphs in a tabular format disclosure for interim reporting purposes only if the disclosure requirements referenced in those paragraphs are required in interim reporting periods by the guidance in other Topics.(P) December 16, 2026; (N) December 16, 2026
220-40-65-1The disclosure requirements in this Section shall be applied consistently for all periods presented. If an entity changes its display of the disclosure requirements in the current reporting period as a result of a change in the election of an alternative or a change in a definition of a disclosure in this Section, the entity shall:- a
Disclose the reason for the change in the period of the change (in the interim and annual reporting periods affected by the change)
- b
Recast the prior periods presented for comparative purposes, except for the requirements in paragraphs , unless it is impracticable to do so. If it is impracticable to do so, the entity shall disclose that fact and explain why it is impracticable to recast prior periods.
Changes described in this paragraph do not represent a change in accounting principle in accordance with Topic 250 on accounting changes and error corrections. (P) December 16, 2026; (N) December 16, 2026
220-40-65-1Some entities provide condensed statements for interim reporting periods and, therefore, present different expense captions on their income statements at annual and interim reporting periods. For an entity that provides condensed statements for interim reporting periods, the guidance in paragraph
220-40-50-4 is applicable in instances in which an entity changes its display of the disclosure requirements for the current interim reporting period compared with the prior interim reporting period or in instances in which the entity changes its display of the disclosure requirements for the current annual reporting period compared with the prior annual reporting period.
(P) December 16, 2026; (N) December 16, 2026
220-40-65-1For interim and annual reporting periods, an entity shall disaggregate, in a tabular format disclosure in the notes to financial statements, all relevant expense captions (see paragraphs for guidance on identifying relevant expense captions) presented on the face of the income statement in continuing operations into the following expense categories:- a
- b
- c
Depreciation (for separate requirement to disclose depreciation expense for the period in total, see paragraph 360-10-50-1(a)) - d
- e
Depreciation, depletion, and amortization of capitalized acquisition, exploration, and development costs recognized as part of oil- and gas-producing activities (see Subtopic 932-360 on extractive activities—oil and gas—property, plant, and equipment) or other amounts of depletion expense (see paragraph 220-40-50-11).
(P) December 16, 2026; (N) December 16, 2026
220-40-65-1Purchases of inventory shall include only amounts within the scope of Topic 330 or within the scope of an Industry Subtopic in Topic 330 (collectively, Topic 330) but shall not include (regardless of the basis selected in paragraph 220-40-50-31) the amounts recognized from any of the following:- a
- b
- c
Amounts excluded by this paragraph shall be included in the other items category, unless separately disclosed voluntarily (see paragraph 220-40-50-30). See paragraphs for additional requirements for the disaggregation of relevant expense captions that contain amounts within the scope of Topic 330.(P) December 16, 2026; (N) December 16, 2026
220-40-65-1When applying the guidance in paragraph 220-40-50-6(b), an entity may elect, but is not required, to include amounts attributable to other transactions entered into for the benefit of employees (for example, the provision of subsidized goods or services) in employee compensation. For interim and annual reporting periods, an entity that includes other transactions entered into for the benefit of employees as part of employee compensation shall disclose both that those transactions have been included and a description of those transactions.(P) December 16, 2026; (N) December 16, 2026
220-40-65-1The amounts provided for depreciation in accordance with paragraph 220-40-50-6(c) and intangible asset amortization in accordance with paragraph 220-40-50-6(d) shall be consistent with the classification of amounts used to satisfy the disclosure requirements for the total depreciation expense and total intangible asset amortization expense disclosures in paragraphs 360-10-50-1(a) and 350-30-50-2(a)(2), respectively, and with the classification of amounts described in paragraph 220-40-50-10.(P) December 16, 2026; (N) December 16, 2026
220-40-65-1Amortization of a right-of-use asset for a finance lease recognized in accordance with paragraphs and amortization of leasehold improvements recognized in accordance with paragraphs shall be disclosed in a manner consistent with how an entity presents depreciation or amortization of similar assets (see paragraph 842-20-45-4(a)). That is, amounts shall be included as part of either depreciation in paragraph 220-40-50-6(c) or intangible asset amortization in paragraph 220-40-50-6(d).(P) December 16, 2026; (N) December 16, 2026
220-40-65-1In determining the amounts to be disclosed in paragraph 220-40-50-6(e), an entity also shall include amounts for depletion expense that are not recognized as part of oil- and gas-producing activities in accordance with Subtopic 932-360 (such as depletion expense recognized by entities within the scope of Topic 930 on mining).(P) December 16, 2026; (N) December 16, 2026
220-40-65-1For the purposes of applying the guidance in this Subtopic, a relevant expense caption is an expense caption presented on the face of the income statement in continuing operations that contains any of the expenses listed in paragraph 220-40-50-6 (including those described in paragraphs ). A relevant expense caption that consists entirely of one expense category listed in paragraph 220-40-50-6 is not subject to the requirements of this Subtopic. For example, if depreciation is a relevant expense caption on the income statement and the caption consists entirely of depreciation in accordance with paragraph 220-40-50-6(c), no additional disclosure is required because the information in the income statement satisfies the disclosure requirements in this Subtopic. In contrast, if the relevant expense caption comprises depreciation and intangible asset amortization, an entity would be required to separately disclose depreciation and intangible asset amortization in accordance with paragraph 220-40-50-6(c) through (d), respectively. Furthermore, in accordance with paragraph 220-40-50-31, when a relevant expense caption contains amounts within the scope of Topic 330, an entity shall apply its chosen basis for disaggregating amounts within the scope of Topic 330 to the expense categories listed in paragraph 220-40-50-6.(P) December 16, 2026; (N) December 16, 2026
220-40-65-1An entity’s share of earnings or losses from investments accounted for under the equity method in accordance with paragraph 323-10-45-1 is not a relevant expense caption for purposes of applying the guidance in this Subtopic. Additionally, an entity is not required to further disaggregate its disclosure of summarized information of results of operations of investments accounted for under the equity method in accordance with paragraph 323-10-50-3(c).(P) December 16, 2026; (N) December 16, 2026
220-40-65-1With the exception of inventory disclosed under the cost-incurred basis described in paragraph 220-40-50-31(a), an entity is not required to further disaggregate costs capitalized as an asset, even if the costs capitalized include the categories listed in paragraph 220-40-50-6. In addition, when an expense amount relates to the derecognition of an asset other than inventory, an entity shall apply the guidance in paragraph 220-40-50-6 based on the nature of the expense at the time that it is recognized in the income statement. (P) December 16, 2026; (N) December 16, 2026
220-40-65-1To illustrate the application of the requirements in paragraph 220-40-50-14, an entity is not required to further disaggregate amortization of costs to fulfill a contract with a customer into the categories required by paragraph 220-40-50-6 (for example, employee compensation). As another example, an entity that capitalizes employee compensation when self-constructing new property, plant, and equipment for internal use is not required to further disaggregate the resulting depreciation into the categories listed in paragraph 220-40-50-6.(P) December 16, 2026; (N) December 16, 2026
220-40-65-1An entity is not required to disaggregate an expense amount into the required expense categories as part of the disclosures required by paragraph 220-40-50-6 if all of the following criteria are met:- a
The expense relates to an obligation that will be settled in the future and there is uncertainty about the timing of settlement.
- b
The expense relates to an obligation that is based on an estimate of a future expenditure.
- c
The expense is not entirely made up of one required expense category (for example, employee compensation).
An expense that meets the above criteria may be required to be disclosed in the same tabular format if it is listed in paragraphs .(P) December 16, 2026; (N) December 16, 2026
220-40-65-1Examples of expenses that meet the criteria in paragraph 220-40-50-16 include provision for losses on contracts (see Subtopic 605-35 on revenue recognition—construction-type and production-type contracts), claims and claims adjustment expenses, and asset retirement obligations, among others. (P) December 16, 2026; (N) December 16, 2026
220-40-65-1Examples of expenses that do not meet the criteria in paragraph 220-40-50-16 include expense amounts related to accruals for liabilities to pay for goods or services that have been received or supplied but have not been paid or invoiced, including amounts due to employees (for example, amounts relating to accrued bonuses, vacation pay, or pension obligations).(P) December 16, 2026; (N) December 16, 2026
220-40-65-1As a practical expedient, when substantially all of an entity’s income statement expense caption comprises purchases of inventory as described in paragraph 220-40-50-7, the entity is not required to apply the guidance in paragraph 220-40-50-6 to that caption. An entity that applies this practical expedient shall disclose a qualitative description of the composition of the expense caption in interim and annual reporting periods.(P) December 16, 2026; (N) December 16, 2026
220-40-65-1As a practical expedient for determining what amounts are classified as employee compensation in paragraph 220-40-50-6(b), an entity that presents an expense caption for salaries and employee benefits (or a similarly named caption) on the face of its income statement to comply with the requirements in SEC Regulation S-X Rule 210.9-04, Statements of Comprehensive Income (see paragraph 942-220-S99-1), may use the amounts classified as salaries and employee benefits in accordance with SEC Regulation S-X Rule 210.9-04 rather than in accordance with the definition of employee compensation included in this Subtopic.(P) December 16, 2026; (N) December 16, 2026
220-40-65-1An entity shall disclose, in the same tabular format disclosure in which the disclosures required by paragraph 220-40-50-6 are provided, each of the following expenses, gains, and losses and the amount recognized in each relevant expense caption (see paragraphs for guidance on identifying relevant expense captions):- a
The amount of research and development assets acquired in a transaction other than a business combination and written off (see paragraph 350-30-50-1(c)) - b
Impairment loss recognized related to an intangible asset (see paragraph 350-30-50-3) - c
- d
Gain or loss recognized in accordance with paragraphs and 360-10-40-5 for long-lived assets classified as held for sale or disposed of (see paragraph 360-10-50-3) - e
Each major type of cost associated with an exit or disposal activity (for example, one-time employee termination benefits, contract termination costs, and other associated costs) (see paragraph 420-10-50-1) - f
Components of net benefit cost recognized (other than service cost amounts included within employee compensation) (see paragraph 715-20-50-1(h)) - g
Bargain purchase gain recognized in a business combination (see paragraph 805-30-50-1(f)) - h
Any gain or loss recognized upon the deconsolidation of a subsidiary or the derecognition of a group of assets in accordance with paragraph 810-10-40-3A (see paragraph 810-10-50-1B) - i
- j
- k
Impairment of license agreements for program material (see paragraph 920-350-50-4) - l
- m
These disclosures shall be included in the tabular format disclosure required by paragraph 220-40-50-6 using the same frequency (that is, whether the disclosure is required at interim and annual reporting periods or only annual reporting periods) as required by the corresponding Topic.(P) December 16, 2028; (N) December 16, 2029
832-10-65-2An entity shall disclose, in the same tabular format disclosure in which the disclosures required by paragraph 220-40-50-6 are provided, each of the following expenses, gains, and losses and the amount recognized in each relevant expense caption (see paragraphs for guidance on identifying relevant expense captions):- a
The amount of research and development assets acquired in a transaction other than a business combination and written off (see paragraph 350-30-50-1(c)) - b
Impairment loss recognized related to an intangible asset (see paragraph 350-30-50-3) - c
- d
Gain or loss recognized in accordance with paragraphs and 360-10-40-5 for long-lived assets classified as held for sale or disposed of (see paragraph 360-10-50-3) - e
Each major type of cost associated with an exit or disposal activity (for example, one-time employee termination benefits, contract termination costs, and other associated costs) (see paragraph 420-10-50-1) - f
Components of net benefit cost recognized (other than service cost amounts included within employee compensation) (see paragraph 715-20-50-1(h)) - g
Bargain purchase gain recognized in a business combination (see paragraph 805-30-50-1(f)) - h
Any gain or loss recognized upon the deconsolidation of a subsidiary or the derecognition of a group of assets in accordance with paragraph 810-10-40-3A (see paragraph 810-10-50-1B) - i
- j
- k
Impairment of license agreements for program material (see paragraph 920-350-50-4) - l
- m
- n
These disclosures shall be included in the tabular format disclosure required by paragraph 220-40-50-6 using the same frequency (that is, whether the disclosure is required at interim and annual reporting periods or only annual reporting periods) as required by the corresponding Topic.(P) December 16, 2027; (N) December 16, 2028
818-10-65-1An entity shall disclose, in the same tabular format disclosure in which the disclosures required by paragraph 220-40-50-6 are provided, each of the following expenses, gains, and losses and the amount recognized in each relevant expense caption (see paragraphs for guidance on identifying relevant expense captions):- a
The amount of research and development assets acquired in a transaction other than a business combination and written off (see paragraph 350-30-50-1(c)) - b
Impairment loss recognized related to an intangible asset (see paragraph 350-30-50-3) - c
- d
Gain or loss recognized in accordance with paragraphs and 360-10-40-5 for long-lived assets classified as held for sale or disposed of (see paragraph 360-10-50-3) - e
Each major type of cost associated with an exit or disposal activity (for example, one-time employee termination benefits, contract termination costs, and other associated costs) (see paragraph 420-10-50-1) - f
Components of net benefit cost recognized (other than service cost amounts included within employee compensation) (see paragraph 715-20-50-1(h)) - g
Bargain purchase gain recognized in a business combination (see paragraph 805-30-50-1(f)) - h
Any gain or loss recognized upon the deconsolidation of a subsidiary or the derecognition of a group of assets in accordance with paragraph 810-10-40-3A (see paragraph 810-10-50-1B) - i
- j
- k
Impairment of license agreements for program material (see paragraph 920-350-50-4) - l
- m
- n
- o
- p
Total impairment expense recognized during the reporting period relating to environmental credits (see paragraph 818-20-50-3(b)) - q
These disclosures shall be included in the tabular format disclosure required by paragraph 220-40-50-6 using the same frequency (that is, whether the disclosure is required at interim and annual reporting periods or only annual reporting periods) as required by the corresponding Topic.(P) December 16, 2026; (N) December 16, 2026
220-40-65-1An entity shall disclose, in the same tabular format disclosure in which the disclosures required by paragraph 220-40-50-6 are provided, each of the following amounts if those amounts are included entirely in one expense caption that also is a relevant expense caption (see paragraphs for guidance on identifying relevant expense captions):- a
- b
Losses on firm purchase commitments (see paragraph 330-10-50-5) - c
Amortization expense attributable to the expiration of an insurance or reinsurance coverage provided under a contract that transfers only significant underwriting risk (see paragraph 340-30-50-2) - d
Amortization of costs to fulfill a contract with a customer (see paragraph 340-40-50-3) - e
Impairment of costs to fulfill a contract with a customer (see paragraph 340-40-50-3) - f
Amortization of costs to obtain a contract with a customer (see paragraph 340-40-50-3) - g
Impairment of costs to obtain a contract with a customer (see paragraph 340-40-50-3) - h
- i
- j
- k
Warranty expense (the total of expenses recognized related to aggregate changes in the liability for accruals related to product warranties issued during the reporting period and the aggregate changes in the liability for accruals related to preexisting warranties, including adjustments related to changes in estimates) (see paragraph 460-10-50-8) - l
Expense related to counterparty default in own-share lending arrangements issued in contemplation of convertible debt issuance (see paragraph 470-20-50-2C) - m
- n
Gains and losses upon consolidation of a variable interest entity that is not a business (see paragraph 810-10-50-3) - o
- p
- q
- r
- s
Net gain or loss recognized from sale and leaseback transactions (see paragraph 842-20-50-4) - t
Gains and losses from nonmonetary transactions (see paragraph 845-10-50-1) - u
These disclosures shall be included in the tabular format disclosure required by paragraph 220-40-50-6 using the same frequency (that is, whether the disclosure is required at interim and annual reporting periods or only annual reporting periods) as required by the corresponding Topic.(P) December 16, 2026; (N) December 16, 2026
220-40-65-1If there is a change in facts and circumstances that results in an item listed in paragraph 220-40-50-22 changing from being included in one relevant expense caption in the current reporting period and multiple relevant expense captions in a comparative period, or vice versa, an entity shall provide the disclosure required by paragraph 205-10-50-1.(P) December 16, 2026; (N) December 16, 2026
220-40-65-1The presence of the expenses, gains, and losses listed in paragraphs would not cause an expense caption to be a relevant expense caption. An entity only shall include the applicable expenses listed in paragraphs in the tabular format disclosures if an expense caption is a relevant expense caption in accordance with paragraphs .(P) December 16, 2026; (N) December 16, 2026
220-40-65-1To illustrate the application of the requirements in paragraph 220-40-50-22, if cost of sales was a relevant expense caption (because cost of sales includes purchases of inventory described in paragraph 220-40-50-6(a)) and if amortization of costs to fulfill a contract with a customer was recognized entirely in cost of sales and not in multiple expense captions presented on the face of the income statement, then amortization of costs to fulfill a contract with a customer would be required to be included as a separate category in the tabular format disclosure in addition to the categories required by paragraph 220-40-50-6.(P) December 16, 2026; (N) December 16, 2026
220-40-65-1For interim and annual reporting periods, an entity that presents a relevant expense caption that includes amounts that are recorded net of an expense reimbursement related to a cost-sharing or cost-reimbursement arrangement from another entity, in the same tabular format disclosure in which the disclosures required by paragraph 220-40-50-6 are provided, shall either:- a
Separately disclose the amount of the expense reimbursement
- b
Disclose the amounts of the expense categories required by paragraphs 220-40-50-6 and that are included in the relevant expense caption net of any reimbursement effects.
(P) December 16, 2026; (N) December 16, 2026
220-40-65-1For interim and annual reporting periods, an entity shall disclose how expense reimbursements related to a cost-sharing or cost-reimbursement arrangement are included in the tabular format disclosure, as described in paragraph 220-40-50-26. (P) December 16, 2026; (N) December 16, 2026
220-40-65-1For interim and annual reporting periods, an entity that includes an expense reimbursement related to a cost-sharing or cost-reimbursement arrangement to another entity in a relevant expense caption shall separately disclose the amount of that expense reimbursement in the same tabular format disclosure in which the disclosures required by paragraph 220-40-50-6 are provided.(P) December 16, 2026; (N) December 16, 2026
220-40-65-1For interim and annual reporting periods, an entity, in the same tabular format disclosure in which the disclosures required by paragraph 220-40-50-6 are provided, shall disclose for each relevant expense caption an amount for other items. The amount for other items is the difference between the following:- a
The amount of the relevant expense caption presented on the face of the income statement
- b
The aggregate amount of expense categories separately disclosed in accordance with paragraphs 220-40-50-6, , 220-40-50-26(a), and 220-40-50-28 that are included in the relevant expense caption.
For interim and annual reporting periods, an entity also shall disclose qualitative descriptions of the composition (based on their natural expense classification) of other items. The detail provided in those qualitative disclosures shall be commensurate with the significance of the amounts being described. Notwithstanding that requirement, an entity is not precluded from further disaggregating relevant expense captions before applying the guidance in this paragraph to the remaining other items. Additional voluntary disclosures may be provided inside or outside the tabular disclosure if those disclosures are not combined with the disaggregated expense amounts required by paragraphs 220-40-50-6, , 220-40-50-26(a), and 220-40-50-28.(P) December 16, 2026; (N) December 16, 2026
220-40-65-1The following are two acceptable bases for disclosing the disaggregation of a relevant expense caption that contains expense amounts related to inventory within the scope of Topic 330: - a
Cost-incurred basis. The amounts disclosed for the disaggregation of a relevant expense caption comprise costs incurred that were capitalized to inventory in accordance with Topic 330 during the current reporting period and any costs incurred that were directly expensed during the current reporting period (including costs that are capitalizable in accordance with Topic 330 but were directly expensed to the income statement). Under this basis, in interim and annual reporting periods, an entity shall disclose an amount for changes in inventories and an amount for other adjustments and reconciling items to reconcile the costs incurred to the total relevant expense caption (see paragraphs ). - b
Expense-incurred basis. The amounts disclosed for the disaggregation of a relevant expense caption comprise expense amounts related to the derecognition of inventory that was previously capitalized in accordance with Topic 330 and any costs incurred that were directly expensed during the current reporting period (including costs that are capitalizable in accordance with Topic 330 but were directly expensed to the income statement). Under this basis, an entity shall disclose the expense amounts related to the derecognition of inventory based on the natural expense category of the costs when they were initially incurred (for example, the expense from the derecognition of inventory may relate to purchases of inventory and employee compensation incurred in prior periods).
In many cases, an entity’s chosen basis will result in disclosed amounts that are different than if the entity had chosen the alternative basis. An entity’s chosen basis should be applied consistently to all expense categories listed in paragraph 220-40-50-6. (P) December 16, 2026; (N) December 16, 2026
220-40-65-1When the amounts disclosed in accordance with paragraph 220-40-50-6 include costs incurred that were capitalized to inventory in accordance with Topic 330 during the reporting period (because an entity has applied the cost-incurred basis in paragraph 220-40-50-31(a)), those amounts often will not equal the amounts expensed as incurred during the reporting period. If the amount of expense recognized and the amount of costs incurred in the current reporting period are not equal, then an entity shall disclose in interim and annual reporting periods a category for the changes in inventories balances to reconcile the costs incurred (which shall include costs capitalized to inventory and costs expensed during the reporting period) to expenses recognized. The amount disclosed for changes in inventories in the current reporting period shall equal the difference between the amount of inventory included on the balance sheet at the end of the prior reporting period and the amount of inventory included on the balance sheet at the end of the current reporting period. As described in paragraph 220-40-50-33, a separate category that comprises any other adjustments and reconciling items shall be provided to reconcile costs incurred to expenses recognized during the reporting period.(P) December 16, 2026; (N) December 16, 2026
220-40-65-1In addition to the changes in inventories category described in paragraph 220-40-50-32, for interim and annual reporting periods, under the cost-incurred basis (see paragraph 220-40-50-31(a)), an entity shall disclose the amount of other adjustments and reconciling items that include (to the extent not disclosed in a separate caption) other amounts that are necessary to reconcile costs incurred to expenses recognized. For example, those items would include, if applicable: - a
The amount of inventory derecognized during the period that is not recognized as an expense (for example, inventory derecognized as part of derecognition transactions within the scope of Subtopic 810-10 on consolidation) - b
The amount attributable to differences in the foreign currency exchange rates used to translate costs incurred, the beginning balance of inventory, and the ending balance of inventory in accordance with Subtopic 830-30 on foreign currency matters—translation of financial statements.
(P) December 16, 2026; (N) December 16, 2026
220-40-65-1Consistent with the requirements in paragraph 220-40-50-30, for interim and annual reporting periods, an entity shall qualitatively describe the nature of amounts (based on their natural expense classification when applicable) included in other adjustments and reconciling items in accordance with paragraph 220-40-50-33.(P) December 16, 2026; (N) December 16, 2026
220-40-65-1For interim and annual reporting periods, an entity shall disclose, in the notes to financial statements, the total selling expenses recognized in continuing operations.(P) December 16, 2026; (N) December 16, 2026
220-40-65-1An entity shall make its own determination of what constitutes a selling expense. An entity’s definition of selling expenses shall include only items that are presented as expenses in the income statement. An entity shall disclose how it defines the term selling expenses in annual reporting periods (or in interim reporting periods if the definition is changed).