# ASC 220-40: Income Statement—Reporting Comprehensive Income — Expense Disaggregation Disclosures

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/220/40/)

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Source downloaded (UTC): 2026-09-09T23:04:51.666Z to 2026-09-09T23:05:14.675Z

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## ASC 220-40: Income Statement—Reporting Comprehensive Income — Expense Disaggregation Disclosures

### Machine-generated study aids

```json
{
  "summary": "ASC 220-40 (added by ASU 2024-03) requires public business entities to disaggregate, in a tabular note disclosure, each \"relevant expense caption\" presented on the face of the income statement in continuing operations into prescribed natural expense categories: purchases of inventory, employee compensation, depreciation, intangible asset amortization, and DD&A of oil-and-gas/other depletion (220-40-50-6). Other GAAP-required expense, gain, and loss items must be pulled into the same table (220-40-50-21 through 50-22), expense reimbursements must be addressed (50-26 through 50-29), and any residual must be shown as \"other items\" with a qualitative description of its composition (50-30). Entities must also disclose total selling expenses and, annually, how they define selling expenses (50-35 through 50-36).",
  "key_points": [
    "Scope is limited to public business entities; private companies, not-for-profit entities, and employee benefit plans under Topics 960, 962, and 965 are excluded (220-40-15-2 through 15-3), and only continuing operations expenses are covered (220-40-50-2).",
    "A relevant expense caption is an income statement caption in continuing operations containing any category listed in 220-40-50-6; a caption consisting entirely of one such category needs no further disclosure, and equity method earnings/losses are never a relevant expense caption (220-40-50-12 through 50-13).",
    "The required tabular categories are purchases of inventory (Topic 330 amounts only, excluding amounts from business combinations, joint venture formations, and initial VIE consolidations), employee compensation (separately showing one-time termination benefits), depreciation, intangible asset amortization, and oil-and-gas DD&A or other depletion (220-40-50-6 through 50-7, 50-11).",
    "For captions containing Topic 330 inventory amounts, an entity elects either the cost-incurred basis (requiring additional 'changes in inventories' and 'other adjustments and reconciling items' captions) or the expense-incurred basis, applied consistently to all categories (220-40-50-31 through 50-34).",
    "Listed items in 220-40-50-21 must be shown by relevant expense caption in the same table; items in 220-40-50-22 (e.g., warranty expense, operating lease cost, credit loss provision) are included only if recognized entirely within a single relevant expense caption, and their mere presence does not make a caption relevant (220-40-50-24).",
    "Each relevant expense caption must show an 'other items' residual equal to the caption total less the separately disclosed amounts, with qualitative descriptions of its composition based on natural expense classification (220-40-50-30).",
    "Estimates or reasonable approximations are permitted (220-40-50-1, 220-40-55-2), practical expedients exist under 50-19 and 50-20, and changes in display require disclosure of the reason and recasting of prior periods unless impracticable without being a Topic 250 accounting principle change (220-40-50-3 through 50-5)."
  ],
  "categories": [
    "Disclosure",
    "Presentation",
    "Financial statement presentation",
    "Inventory and PP&E"
  ],
  "audience_level": "intermediate",
  "student_note": "This is a pure disclosure standard—it changes nothing about recognition or measurement and does not require any change to the face of the income statement. The most common misunderstanding is thinking every expense caption must be disaggregated: only captions that actually contain one of the five categories in 220-40-50-6 are \"relevant,\" and items in 220-40-50-21 through 50-22 never make a caption relevant by themselves.",
  "related_topics": [
    "330",
    "350-30",
    "360-10",
    "420-10",
    "842-20",
    "932-360"
  ],
  "key_concepts": [
    "relevant expense caption",
    "expense disaggregation",
    "tabular format disclosure",
    "purchases of inventory",
    "employee compensation",
    "other items residual",
    "cost-incurred versus expense-incurred basis",
    "selling expenses"
  ]
}
```

Source downloaded (UTC): 2026-09-09T23:04:51.666Z to 2026-09-09T23:04:51.666Z

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## ASC 220-40-00: 00 Status

[Read section](https://asc.understandingaccounting.org/asc/220/40/#00-status)

SEC content: no

##### [220-40-00-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-00-1)

Pending content: no

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The following table identifies the changes made to this Subtopic.

<table class="asc-table" frame="all" id="SL4644637-158351"><tbody><tr><td class="entry"><strong class="ph b">Paragraph</strong></td><td class="entry"><strong class="ph b">Action</strong></td><td class="entry"><strong class="ph b">Accounting Standards Update</strong></td><td class="entry"><strong class="ph b">Date</strong></td></tr><tr><td class="entry"></td><td class="entry"></td><td class="entry"></td><td class="entry"></td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/a/#accretion-expense" class="term" title="An amount recognized as an expense classified as an operating item in the statement of income resulting from the increase in the carrying amount of the liability associated with the asset retirement obligation."><span>Accretion Expense</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/a/#acquiree" class="term" title="The business or businesses that the acquirer obtains control of in a business combination. This term also includes a nonprofit activity or business that a not-for-profit acquirer obtains control of in an acquisition by a not-for-profit entity."><span>Acquiree</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/a/#acquirer" class="term" title="The entity that obtains control of the acquiree. However, in a business combination in which a variable interest entity (VIE) is acquired, the primary beneficiary of that entity always is the acquirer. (P) December 16, 2026; (N) December 16, 2026805-10-65-5The entity that obtains control of the acquiree.See paragraphs 805-10-25-4805-10-25-5 for guidance on determining the acquirer."><span>Acquirer</span></a></td><td class="entry">Amended</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2025-03/" class="xref">Accounting Standards Update No. 2025-03</a></td><td class="entry">05/12/2025</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/a/#acquirer" class="term" title="The entity that obtains control of the acquiree. However, in a business combination in which a variable interest entity (VIE) is acquired, the primary beneficiary of that entity always is the acquirer. (P) December 16, 2026; (N) December 16, 2026805-10-65-5The entity that obtains control of the acquiree.See paragraphs 805-10-25-4805-10-25-5 for guidance on determining the acquirer."><span>Acquirer</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/a/#acquisition-by-a-not-for-profit-entity" class="term" title="A transaction or other event in which a not-for-profit acquirer obtains control of one or more nonprofit activities or businesses and initially recognizes their assets and liabilities in the acquirer's financial statements. When applicable guidance in Topic 805 is applied by a not-for-profit entity, the term business combination has the same meaning as this term has for a for-profit entity. Likewise, a reference to business combinations in guidance that links to Topic 805 has the same meaning as a reference to acquisitions by not-for-profit entities."><span>Acquisition by a Not-for-Profit Entity</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/a/#acquisition-costs" class="term" title="Costs that are related directly to the successful acquisition of new or renewal insurance contracts."><span>Acquisition Costs</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/a/#asset-retirement-obligation" class="term" title="An obligation associated with the retirement of a tangible long-lived asset."><span>Asset Retirement Obligation</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/b/#business" class="term" title="Paragraphs 805-10-55-3A805-10-55-4805-10-55-5805-10-55-6 and 805-10-55-8805-10-55-9 define what is considered a business."><span>Business</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/b/#business-combination" class="term" title="A transaction or other event in which an acquirer obtains control of one or more businesses. Transactions sometimes referred to as true mergers or mergers of equals also are business combinations. See also Acquisition by a Not-for-Profit Entity."><span>Business Combination</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/c/#commencement-date-of-the-lease-commencement-date" class="term" title="The date on which a lessor makes an underlying asset available for use by a lessee. See paragraphs 842-10-55-19842-10-55-20842-10-55-21 for implementation guidance on the commencement date."><span>Commencement Date of the Lease (Commencement Date)</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/c/#contract" class="term" title="An agreement between two or more parties that creates enforceable rights and obligations."><span>Contract</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/c/#corporate-joint-venture" class="term" title="A corporation owned and operated by a small group of entities (the joint venturers) as a separate and specific business or project for the mutual benefit of the members of the group. A government may also be a member of the group. The purpose of a corporate joint venture frequently is to share risks and rewards in developing a new market, product or technology; to combine complementary technological knowledge; or to pool resources in developing production or other facilities. A corporate joint venture also usually provides an arrangement under which each joint venturer may participate, directly or indirectly, in the overall management of the joint venture. Joint venturers thus have an interest or relationship other than as passive investors. An entity that is a subsidiary of one of the joint venturers is not a corporate joint venture. The ownership of a corporate joint venture seldom changes, and its stock is usually not traded publicly. A noncontrolling interest held by public ownership, however, does not preclude a corporation from being a corporate joint venture."><span>Corporate Joint Venture</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/c/#customer" class="term" title="A party that has contracted with an entity to obtain goods or services that are an output of the entity's ordinary activities in exchange for consideration."><span>Customer</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/d/#defined-benefit-plan" class="term" title="A defined benefit plan provides participants with a determinable benefit based on a formula provided for in the plan. Defined benefit health and welfare plans—Defined benefit health and welfare plans specify a determinable benefit, which may be in the form of a reimbursement to the covered plan participant or a direct payment to providers or third-party insurers for the cost of specified services. Such plans may also include benefits that are payable as a lump sum, such as death benefits. The level of benefits may be defined or limited based on factors such as age, years of service, and salary. Contributions may be determined by the plan's actuary or be based on premiums, actual claims paid, hours worked, or other factors determined by the plan sponsor. Even when a plan is funded pursuant to agreements that specify a fixed rate of employer contributions (for example, a collectively bargained multiemployer plan), such a plan may nevertheless be a defined benefit health and welfare plan if its substance is to provide a defined benefit. Defined benefit pension plan—A pension plan that defines an amount of pension benefit to be provided, usually as a function of one or more factors such as age, years of service, or compensation. Any pension plan that is not a defined contribution pension plan is, for purposes of Subtopic 715-30, a defined benefit pension plan. Defined benefit postretirement plan—A plan that defines postretirement benefits in terms of monetary amounts (for example, $100,000 of life insurance) or benefit coverage to be provided (for example, up to $200 per day for hospitalization, or 80 percent of the cost of specified surgical procedures). Any postretirement benefit plan that is not a defined contribution postretirement plan is, for purposes of Subtopic 715-60, a defined benefit postretirement plan. (Specified monetary amounts and benefit coverage are collectively referred to as benefits.)"><span>Defined Benefit Plan</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/d/#defined-contribution-plan" class="term" title="A plan that provides an individual account for each participant and provides benefits that are based on all of the following: amounts contributed to the participant's account by the employer or employee; investment experience; and any forfeitures allocated to the account, less any administrative expenses charged to the plan. Defined contribution health and welfare plans—Defined contribution health and welfare plans maintain an individual account for each plan participant. They have terms that specify the means of determining the contributions to participants' accounts, rather than the amount of benefits the participants are to receive. The benefits a plan participant will receive are limited to the amount contributed to the participant's account, investment experience, expenses, and any forfeitures allocated to the participant's account. These plans also include flexible spending arrangements. Defined contribution postretirement plan—A plan that provides postretirement benefits in return for services rendered, provides an individual account for each plan participant, and specifies how contributions to the individual's account are to be determined rather than specifies the amount of benefits the individual is to receive. Under a defined contribution postretirement plan, the benefits a plan participant will receive depend solely on the amount contributed to the plan participant's account, the returns earned on investments of those contributions, and the forfeitures of other plan participants' benefits that may be allocated to that plan participant's account."><span>Defined Contribution Plan</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/d/#derivative-instrument" class="term" title="Paragraphs 815-10-15-83815-10-15-84815-10-15-85815-10-15-86815-10-15-87815-10-15-88815-10-15-89815-10-15-90815-10-15-91815-10-15-92815-10-15-93815-10-15-94815-10-15-95815-10-15-96815-10-15-97815-10-15-98815-10-15-99815-10-15-100815-10-15-101815-10-15-102815-10-15-103815-10-15-104815-10-15-105815-10-15-106815-10-15-107815-10-15-108815-10-15-109815-10-15-110815-10-15-111815-10-15-112815-10-15-113815-10-15-114815-10-15-115815-10-15-116815-10-15-117815-10-15-118815-10-15-119815-10-15-120815-10-15-121815-10-15-122815-10-15-123815-10-15-124815-10-15-125815-10-15-126815-10-15-127815-10-15-128815-10-15-129815-10-15-130815-10-15-131815-10-15-132815-10-15-133815-10-15-134815-10-15-135815-10-15-136815-10-15-137815-10-15-138815-10-15-139 define the term derivative instrument."><span>Derivative Instrument</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/d/#direct-financing-lease" class="term" title="From the perspective of a lessor, a lease that meets none of the criteria in paragraph 842-10-25-2 but meets the criteria in paragraph 842-10-25-3(b)and is not an operating lease in accordance with paragraph 842-10-25-3A."><span>Direct Financing Lease</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/e/#employee" class="term" title="An individual over whom the grantor of a share-based compensation award exercises or has the right to exercise sufficient control to establish an employer-employee relationship based on common law as illustrated in case law and currently under U.S. Internal Revenue Service (IRS) Revenue Ruling 87-41. A reporting entity based in a foreign jurisdiction would determine whether an employee-employer relationship exists based on the pertinent laws of that jurisdiction. Accordingly, a grantee meets the definition of an employee if the grantor consistently represents that individual to be an employee under common law. The definition of an employee for payroll tax purposes under the U.S. Internal Revenue Code includes common law employees. Accordingly, a grantor that classifies a grantee potentially subject to U.S. payroll taxes as an employee also must represent that individual as an employee for payroll tax purposes (unless the grantee is a leased employee as described below). A grantee does not meet the definition of an employee solely because the grantor represents that individual as an employee for some, but not all, purposes. For example, a requirement or decision to classify a grantee as an employee for U.S. payroll tax purposes does not, by itself, indicate that the grantee is an employee because the grantee also must be an employee of the grantor under common law. A leased individual is deemed to be an employee of the lessee if all of the following requirements are met: The leased individual qualifies as a common law employee of the lessee, and the lessor is contractually required to remit payroll taxes on the compensation paid to the leased individual for the services provided to the lessee. The lessor and lessee agree in writing to all of the following conditions related to the leased individual: The lessee has the exclusive right to grant stock compensation to the individual for the employee service to the lessee. The lessee has a right to hire, fire, and control the activities of the individual. (The lessor also may have that right.) The lessee has the exclusive right to determine the economic value of the services performed by the individual (including wages and the number of units and value of stock compensation granted). The individual has the ability to participate in the lessee's employee benefit plans, if any, on the same basis as other comparable employees of the lessee. The lessee agrees to and remits to the lessor funds sufficient to cover the complete compensation, including all payroll taxes, of the individual on or before a contractually agreed upon date or dates. A nonemployee director does not satisfy this definition of employee. Nevertheless, nonemployee directors acting in their role as members of a board of directors are treated as employees if those directors were elected by the employer's shareholders or appointed to a board position that will be filled by shareholder election when the existing term expires. However, that requirement applies only to awards granted to nonemployee directors for their services as directors. Awards granted to those individuals for other services shall be accounted for as awards to nonemployees. (P) December 16, 2026; (N) December 16, 2026220-40-65-1An individual over whom a reporting entity exercises or has the right to exercise sufficient control to establish an employer-employee relationship based on common law as illustrated in case law and currently under U.S. Internal Revenue Service (IRS) Revenue Ruling 87-41. A reporting entity based in a foreign jurisdiction would determine whether an employee-employer relationship exists based on the pertinent laws of that jurisdiction. Accordingly, an individual meets the definition of an employee if the reporting entity consistently represents that individual to be an employee under common law. The definition of an employee for payroll tax purposes under the U.S. Internal Revenue Code includes common law employees. Accordingly, a reporting entity that classifies an individual potentially subject to U.S. payroll taxes as an employee also must represent that individual as an employee for payroll tax purposes (unless the individual is a leased employee as described below). An individual that meets the definition of an employee includes, but is not limited to, a full-time, part-time, temporary, or seasonal employee. An individual does not meet the definition of an employee solely because the reporting entity represents that individual as an employee for some, but not all, purposes. For example, a requirement or decision to classify an individual as an employee for U.S. payroll tax purposes does not, by itself, indicate that the individual is an employee because the individual also must be an employee of the reporting entity under common law. A leased individual is deemed to be an employee of the lessee if all of the following requirements are met: The leased individual qualifies as a common law employee of the lessee, and the lessor is contractually required to remit payroll taxes on the compensation paid to the leased individual for the services provided to the lessee. The lessor and lessee agree in writing to all of the following conditions related to the leased individual: The lessee has the exclusive right to grant compensation to the individual for the employee service to the lessee. The lessee has a right to hire, fire, and control the activities of the individual. (The lessor also may have that right.) The lessee has the exclusive right to determine the economic value of the services performed by the individual (including wages and the number of units and value of stock compensation granted). The individual has the ability to participate in the lessee's employee benefit plans, if any, on the same basis as other comparable employees of the lessee. The lessee agrees to and remits to the lessor funds sufficient to cover the complete compensation, including all payroll taxes, of the individual on or before a contractually agreed upon date or dates. A nonemployee director does not satisfy this definition of employee. Nevertheless, nonemployee directors acting in their role as members of a board of directors are treated as employees if those directors were elected by the employer's shareholders or appointed to a board position that will be filled by shareholder election when the existing term expires. However, that requirement applies only to awards and other compensation granted to nonemployee directors for their services as directors. Awards granted and compensation paid to those individuals for other services shall be accounted for as awards and compensation to nonemployees."><span>Employee</span></a> (2nd def.)</td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/e/#employee-compensation" class="term" title="(P) December 16, 2026; (N) December 16, 2026220-40-65-1All forms of cash consideration (including deferred cash compensation), share-based payment arrangements, medical care benefits, pension benefits, postretirement benefits, and nonretirement postemployment benefits (including special or contractual termination benefits) given by an entity in exchange for service rendered by employees or for the termination of employment. This includes compensation cost arising from wages, salaries, profit-sharing, bonuses, one-time employee termination benefits, other postemployment benefits, employee stock ownership plans, employee share purchase plans, defined contribution plans, multiemployer plans, and any other compensation cost recognized in accordance with the guidance in Topic 710 on compensation, Topic 712 on nonretirement postemployment benefits, Topic 715 on retirement benefits, and Topic 718 on stock compensation. This also includes compulsory payments paid to the general government that confer entitlement to receive a (contingent) future social benefit, such as unemployment insurance benefits and supplements; accident, injury, and sickness benefits; old-age, disability, and survivors’ pensions; and family allowances, reimbursements for medical and hospital expenses, or provision of hospital or medical services. For defined benefit plans within the scope of Topic 715, employee compensation includes only the service cost component of net periodic pension cost and the service cost component of net periodic postretirement benefit cost."><span>Employee Compensation</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/e/#employee-stock-ownership-plan" class="term" title="An employee stock ownership plan is an employee benefit plan that is described by the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986 as a stock bonus plan, or combination stock bonus and money purchase pension plan, designed to invest primarily in employer stock. Also called an employee share ownership plan."><span>Employee Stock Ownership Plan</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/e/#environmental-credit" class="term" title="(P) December 16, 2027; (N) December 16, 2028818-10-65-1An enforceable right that is acquired, internally generated, granted by a regulatory agency or its designee(s), or received in a nonreciprocal transfer that is not a grant from a regulator or its designee(s) that meets all of the following criteria:Lacks physical substance and is not a financial asset.Is represented to prevent, control, reduce, or remove emissions or other pollution.Is, or previously was, separately transferable in an exchange transaction. If an item is no longer separately transferable in an exchange transaction, an entity must be able to use that item to satisfy an environmental credit obligation to meet this criterion.Is not an income tax credit that may be used to settle an entity’s income tax liability, regardless of whether the entity has a tax liability or intends to use the credit for that purpose.An environmental credit that meets the above criteria may exist in a variety of forms, including (but not limited to) credits, certificates, allowances, and offsets."><span>Environmental Credit</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2026-02/" class="xref">Accounting Standards Update No. 2026-02</a></td><td class="entry">05/19/2026</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/e/#environmental-credit-obligation" class="term" title="(P) December 16, 2027; (N) December 16, 2028818-10-65-1A regulatory compliance obligation arising from existing or enacted laws, statutes, or ordinances represented to prevent, control, reduce, or remove emissions or other pollution that may be settled with environmental credits. Obligations within the scope of Subtopic 410-30 are not environmental credit obligations."><span>Environmental Credit Obligation</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2026-02/" class="xref">Accounting Standards Update No. 2026-02</a></td><td class="entry">05/19/2026</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/e/#exchange" class="term" title="An exchange (or exchange transaction) is a reciprocal transfer between two entities that results in one of the entities acquiring assets or services or satisfying liabilities by surrendering other assets or services or incurring other obligations."><span>Exchange</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2025-10/" class="xref">Accounting Standards Update No. 2025-10</a></td><td class="entry">12/04/2025</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/f/#fair-value" class="term" title="The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date."><span>Fair Value</span></a> (2<sup class="ph sup">nd</sup> def.)</td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2025-10/" class="xref">Accounting Standards Update No. 2025-10</a></td><td class="entry">12/04/2025</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/f/#film-costs" class="term" title="Film costs include all direct negative costs incurred in the physical production of a film, as well as allocations of production overhead and capitalized interest in accordance with Topic 835. Examples of direct negative costs include costs of story and scenario; compensation of cast, directors, producers, extras, and miscellaneous staff; costs of set construction and operations, wardrobe, and accessories; costs of sound synchronization; rental facilities on location; and postproduction costs such as music, special effects, and editing."><span>Film Costs</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/f/#finance-lease" class="term" title="From the perspective of a lessee, a lease that meets one or more of the criteria in paragraph 842-10-25-2."><span>Finance Lease</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/f/#financial-asset" class="term" title="Cash, evidence of an ownership interest in an entity, or a contract that conveys to one entity a right to do either of the following: Receive cash or another financial instrument from a second entity Exchange other financial instruments on potentially favorable terms with the second entity."><span>Financial Asset</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2026-02/" class="xref">Accounting Standards Update No. 2026-02</a></td><td class="entry">05/19/2026</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/g/#government-grant" class="term" title="(P) December 16, 2028; (N) December 16, 2029832-10-65-2A transfer of a monetary asset or a tangible nonmonetary asset, other than in an exchange transaction (including an exchange transaction that may be at a significant discount to fair value), from a government to an entity except for a not-for-profit entity and an employee benefit plan within the scope of Topics 960, 962, and 965 on plan accounting."><span>Government Grant</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2025-10/" class="xref">Accounting Standards Update No. 2025-10</a></td><td class="entry">12/04/2025</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/h/#hosting-arrangement" class="term" title="In connection with accessing and using software products, an arrangement in which the customer of the software does not currently have possession of the software; rather, the customer accesses and uses the software on an as-needed basis."><span>Hosting Arrangement</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/i/#impairment" class="term" title="Impairment is the condition that exists when the carrying amount of a long-lived asset (asset group) exceeds its fair value."><span>Impairment</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/i/#inactive-employees" class="term" title="Employees who are not currently rendering service to the employer and who have not been terminated. They include those who have been laid off and those on disability leave, regardless of whether they are expected to return to active status."><span>Inactive Employees</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/i/#income-taxes" class="term" title="Domestic and foreign federal (national), state, and local (including franchise) taxes based on income."><span>Income Taxes</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2026-02/" class="xref">Accounting Standards Update No. 2026-02</a></td><td class="entry">05/19/2026</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/i/#intangible-assets" class="term" title="Assets (not including financial assets) that lack physical substance. (The term intangible assets is used to refer to intangible assets other than goodwill.)"><span>Intangible Assets</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/i/#inventory" class="term" title="The aggregate of those items of tangible personal property that have any of the following characteristics: Held for sale in the ordinary course of business In process of production for such sale To be currently consumed in the production of goods or services to be available for sale. The term inventory embraces goods awaiting sale (the merchandise of a trading concern and the finished goods of a manufacturer), goods in the course of production (work in process), and goods to be consumed directly or indirectly in production (raw materials and supplies). This definition of inventories excludes long-term assets subject to depreciation accounting, or goods which, when put into use, will be so classified. The fact that a depreciable asset is retired from regular use and held for sale does not indicate that the item should be classified as part of the inventory. Raw materials and supplies purchased for production may be used or consumed for the construction of long-term assets or other purposes not related to production, but the fact that inventory items representing a small portion of the total may not be absorbed ultimately in the production process does not require separate classification. By trade practice, operating materials and supplies of certain types of entities such as oil producers are usually treated as inventory."><span>Inventory</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/j/#joint-venture" class="term" title="An entity owned and operated by a small group of businesses (the joint venturers) as a separate and specific business or project for the mutual benefit of the members of the group. A government may also be a member of the group. The purpose of a joint venture frequently is to share risks and rewards in developing a new market, product, or technology; to combine complementary technological knowledge; or to pool resources in developing production or other facilities. A joint venture also usually provides an arrangement under which each joint venturer may participate, directly or indirectly, in the overall management of the joint venture. Joint venturers thus have an interest or relationship other than as passive investors. An entity that is a subsidiary of one of the joint venturers is not a joint venture. The ownership of a joint venture seldom changes, and its equity interests usually are not traded publicly. A minority public ownership, however, does not preclude an entity from being a joint venture. As distinguished from a corporate joint venture, a joint venture is not limited to corporate entities."><span>Joint Venture</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/l/#lease" class="term" title="A contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration."><span>Lease</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/l/#lease-term" class="term" title="The noncancellable period for which a lessee has the right to use an underlying asset, together with all of the following: Periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option Periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option Periods covered by an option to extend (or not to terminate) the lease in which exercise of the option is controlled by the lessor."><span>Lease Term</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/l/#legal-entity" class="term" title="Any legal structure used to conduct activities or to hold assets. Some examples of such structures are corporations, partnerships, limited liability companies, grantor trusts, and other trusts."><span>Legal Entity</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/l/#lessee" class="term" title="An entity that enters into a contract to obtain the right to use an underlying asset for a period of time in exchange for consideration."><span>Lessee</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/l/#lessor" class="term" title="An entity that enters into a contract to provide the right to use an underlying asset for a period of time in exchange for consideration."><span>Lessor</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/l/#license-agreement" class="term" title="A typical license agreement for program material (for example, features, specials, series, or cartoons) covers several programs (a package) and grants a television station, group of stations, network, pay television, or cable television system (licensee) the right to broadcast either a specified number or an unlimited number of showings over a maximum period of time (license period) for a specified fee."><span>License Agreement</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/l/#loss-contingency" class="term" title="An existing condition, situation, or set of circumstances involving uncertainty as to possible loss to an entity that will ultimately be resolved when one or more future events occur or fail to occur. The term loss is used for convenience to include many charges against income that are commonly referred to as expenses and others that are commonly referred to as losses."><span>Loss Contingency</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/m/#monetary-assets" class="term" title="Money or a claim to receive a sum of money the amount of which is fixed or determinable without reference to future prices of specific goods or services."><span>Monetary Assets</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2025-10/" class="xref">Accounting Standards Update No. 2025-10</a></td><td class="entry">12/04/2025</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/m/#multiemployer-plan" class="term" title="A pension or postretirement benefit plan to which two or more unrelated employers contribute, usually pursuant to one or more collective-bargaining agreements. A characteristic of multiemployer plans is that assets contributed by one participating employer may be used to provide benefits to employees of other participating employers since assets contributed by an employer are not segregated in a separate account or restricted to provide benefits only to employees of that employer. A multiemployer plan is usually administered by a board of trustees composed of management and labor representatives and may also be referred to as a joint trust or union plan. Generally, many employers participate in a multiemployer plan, and an employer may participate in more than one plan. The employers participating in multiemployer plans usually have a common industry bond, but for some plans the employers are in different industries and the labor union may be their only common bond. Some multiemployer plans do not involve a union. For example, local chapters of a not-for-profit entity (NFP) may participate in a plan established by the related national organization."><span>Multiemployer Plan</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/n/#natural-expense-classification" class="term" title="A method of grouping expenses according to the kinds of economic benefits received in incurring those expenses. Examples of natural expense classifications include salaries and wages, employee benefits, professional services, supplies, interest expense, rent, utilities, and depreciation. (P) December 16, 2026; (N) December 16, 2026220-40-65-1A method of grouping expenses according to the types of economic benefits received in incurring those expenses. Examples of natural expense classifications include salaries and wages, employee benefits, nonemployee professional services, supplies, interest expense, rent, utilities, and depreciation."><span>Natural Expense Classification</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/n/#nonreciprocal-transfer" class="term" title="Nonreciprocal transfer is a transfer of assets or services in one direction, either from an entity to its owners (whether or not in exchange for their ownership interests) or to another entity, or from owners or another entity to the entity. An entity's reacquisition of its outstanding stock is an example of a nonreciprocal transfer."><span>Nonreciprocal Transfer</span></a> (1st def.)</td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2026-02/" class="xref">Accounting Standards Update No. 2026-02</a></td><td class="entry">05/19/2026</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/n/#nonretirement-postemployment-benefits" class="term" title="All types of benefits, other than those provided through a pension or other postretirement plan (see Subtopics 715-30 and 715-60), provided to former or inactive employees, their beneficiaries, and covered dependents."><span>Nonretirement Postemployment Benefits</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity" class="term" title="An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans."><span>Not-for-Profit Entity</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/o/#oil-and-gas-producing-activities" class="term" title="Paragraph 932-10-15-2A defines the term oil- and gas-producing activities."><span>Oil- and Gas-Producing Activities</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/o/#one-time-employee-termination-benefits" class="term" title="Benefits provided to current employees that are involuntarily terminated under the terms of a one-time benefit arrangement."><span>One-Time Employee Termination Benefits</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/o/#operating-lease" class="term" title="From the perspective of a lessee, any lease other than a finance lease. From the perspective of a lessor, any lease other than a sales-type lease or a direct financing lease."><span>Operating Lease</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/o/#other-postemployment-benefits" class="term" title="Benefits, other than special or contractual termination benefits, that are provided by an employer to former or inactive employees after employment but before retirement including benefits provided to beneficiaries and covered dependents."><span>Other Postemployment Benefits</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/p/#pension-benefits" class="term" title="Periodic (usually monthly) payments made pursuant to the terms of the pension plan to a person who has retired from employment or to that person's beneficiary."><span>Pension Benefits</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/p/#postretirement-benefits" class="term" title="All forms of benefits, other than retirement income, provided by an employer to retirees. Those benefits may be defined in terms of specified benefits, such as health care, tuition assistance, or legal services, that are provided to retirees as the need for those benefits arises, such as certain health care benefits, or they may be defined in terms of monetary amounts that become payable on the occurrence of a specified event, such as life insurance benefits."><span>Postretirement Benefits</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/p/#private-company" class="term" title="An entity other than a public business entity, a not-for-profit entity, or an employee benefit plan within the scope of Topics 960 through 965 on plan accounting."><span>Private Company</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/p/#public-business-entity" class="term" title="A public business entity is a business entity meeting any one of the criteria below. Neither a not-for-profit entity nor an employee benefit plan is a business entity. It is required by the U.S. Securities and Exchange Commission (SEC) to file or furnish financial statements, or does file or furnish financial statements (including voluntary filers), with the SEC (including other entities whose financial statements or financial information are required to be or are included in a filing). It is required by the Securities Exchange Act of 1934 (the Act), as amended, or rules or regulations promulgated under the Act, to file or furnish financial statements with a regulatory agency other than the SEC. It is required to file or furnish financial statements with a foreign or domestic regulatory agency in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer. It has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market. It has one or more securities that are not subject to contractual restrictions on transfer, and it is required by law, contract, or regulation to prepare U.S. GAAP financial statements (including notes) and make them publicly available on a periodic basis (for example, interim or annual periods). An entity must meet both of these conditions to meet this criterion. An entity may meet the definition of a public business entity solely because its financial statements or financial information is included in another entity's filing with the SEC. In that case, the entity is only a public business entity for purposes of financial statements that are filed or furnished with the SEC."><span>Public Business Entity</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/r/#reinsurance" class="term" title="A transaction in which a reinsurer (assuming entity), for a consideration (premium), assumes all or part of a risk undertaken originally by another insurer (ceding entity). For indemnity reinsurance, the legal rights of the insured are not affected by the reinsurance transaction and the insurance entity issuing the insurance contract remains liable to the insured for payment of policy benefits. Assumption or novation reinsurance contracts that are legal replacements of one insurer by another extinguish the ceding entity's liability to the policyholder."><span>Reinsurance</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/r/#right-of-use-asset" class="term" title="An asset that represents a lessee's right to use an underlying asset for the lease term."><span>Right-of-Use Asset</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/s/#sales-type-lease" class="term" title="From the perspective of a lessor, a lease that meets one or more of the criteria in paragraph 842-10-25-2 and is not an operating lease in accordance with paragraph 842-10-25-3A."><span>Sales-Type Lease</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/s/#security" class="term" title="A share, participation, or other interest in property or in an entity of the issuer or an obligation of the issuer that has all of the following characteristics: It is either represented by an instrument issued in bearer or registered form or, if not represented by an instrument, is registered in books maintained to record transfers by or on behalf of the issuer. It is of a type commonly dealt in on securities exchanges or markets or, when represented by an instrument, is commonly recognized in any area in which it is issued or dealt in as a medium for investment. It either is one of a class or series or by its terms is divisible into a class or series of shares, participations, interests, or obligations."><span>Security</span></a> (2nd def.)</td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/s/#service-cost-component-of-net-periodic-pension-cost" class="term" title="A component of net periodic pension cost recognized in a period determined as the actuarial present value of benefits attributed by the pension benefit formula to services rendered by employees during that period. The service cost component is a portion of the projected benefit obligation and is unaffected by the funded status of the plan."><span>Service Cost (Component of Net Periodic Pension Cost)</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/s/#service-cost-component-of-net-periodic-postretirement-benefit-cost" class="term" title="The actuarial present value of benefits attributed to services rendered by employees during the period (the portion of the expected postretirement benefit obligation attributed to service in the period). The service cost component is the same for an unfunded plan, a plan with minimal funding, and a well-funded plan."><span>Service Cost (Component of Net Periodic Postretirement Benefit Cost)</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/s/#share-based-payment-arrangements" class="term" title="An arrangement under which either of the following conditions is met: One or more suppliers of goods or services (including employees) receive awards of equity shares, equity share options, or other equity instruments. The entity incurs liabilities to suppliers that meet either of the following conditions: The amounts are based, at least in part, on the price of the entity's shares or other equity instruments. (The phrase at least in part is used because an award may be indexed to both the price of the entity's shares and something other than either the price of the entity's shares or a market, performance, or service condition.) The awards require or may require settlement by issuance of the entity's shares. The term shares includes various forms of ownership interest that may not take the legal form of securities (for example, partnership interests), as well as other interests, including those that are liabilities in substance but not in form. Equity shares refers only to shares that are accounted for as equity. Also called share-based compensation arrangements."><span>Share-Based Payment Arrangements</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/s/#short-term-lease" class="term" title="A lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise."><span>Short-Term Lease</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/s/#subsidiary" class="term" title="An entity, including an unincorporated entity such as a partnership or trust, in which another entity, known as its parent, holds a controlling financial interest. (Also, a variable interest entity that is consolidated by a primary beneficiary.)"><span>Subsidiary</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/t/#termination-benefits" class="term" title="Benefits provided by an employer to employees in connection with their termination of employment. They may be either special termination benefits offered only for a short period of time or contractual benefits required by the terms of a plan only if a specified event, such as a plant closing, occurs."><span>Termination Benefits</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/t/#transaction-gain-or-loss" class="term" title="Transaction gains or losses result from a change in exchange rates between the functional currency and the currency in which a foreign currency transaction is denominated. They represent an increase or decrease in both of the following: The actual functional currency cash flows realized upon settlement of foreign currency transactions The expected functional currency cash flows on unsettled foreign currency transactions."><span>Transaction Gain or Loss</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/t/#troubled-debt-restructuring" class="term" title="A restructuring of a debt constitutes a troubled debt restructuring if the creditor for economic or legal reasons related to the debtor's financial difficulties grants a concession to the debtor that it would not otherwise consider."><span>Troubled Debt Restructuring</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/u/#underlying-asset" class="term" title="An asset that is the subject of a lease for which a right to use that asset has been conveyed to a lessee. The underlying asset could be a physically distinct portion of a single asset."><span>Underlying Asset</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/u/#underwriting-risk" class="term" title="The risk arising from uncertainties about the ultimate amount of net cash flows from premiums, commissions, claims, and claim settlement expenses paid under a contract."><span>Underwriting Risk</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/v/#variable-interest-entity" class="term" title="A legal entity subject to consolidation according to the provisions of the Variable Interest Entities Subsections of Subtopic 810-10."><span>Variable Interest Entity</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/glossary/w/#warranty" class="term" title="A guarantee for which the underlying is related to the performance (regarding function, not price) of nonfinancial assets that are owned by the guaranteed party. The obligation may be incurred in connection with the sale of goods or services; if so, it may require further performance by the seller after the sale has taken place."><span>Warranty</span></a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/asc/220/40/#220-40-05-1" class="xref">220-40-05-1</a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><div class="xref-range displayInline"><a href="https://asc.understandingaccounting.org/asc/220/40/#220-40-15-1" class="xref">220-40-15-1 through 15-3</a></div></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><div class="xref-range displayInline"><a href="https://asc.understandingaccounting.org/asc/220/40/#220-40-50-1" class="xref">220-40-50-1 through 50-36</a></div></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21" class="xref">220-40-50-21</a></td><td class="entry">Amended</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2026-02/" class="xref">Accounting Standards Update No. 2026-02</a></td><td class="entry">05/19/2026</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21" class="xref">220-40-50-21</a></td><td class="entry">Amended</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2025-10/" class="xref">Accounting Standards Update No. 2025-10</a></td><td class="entry">12/04/2025</td></tr><tr><td class="entry"><div class="xref-range displayInline"><a href="https://asc.understandingaccounting.org/asc/220/40/#220-40-55-1" class="xref">220-40-55-1 through 55-25</a></div></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1" class="xref">220-40-65-1</a></td><td class="entry">Amended</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2025-01/" class="xref">Accounting Standards Update No. 2025-01</a></td><td class="entry">01/06/2025</td></tr><tr><td class="entry"><a href="https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1" class="xref">220-40-65-1</a></td><td class="entry">Added</td><td class="entry"><a href="https://asc.understandingaccounting.org/updates/asu-2024-03/" class="xref">Accounting Standards Update No. 2024-03</a></td><td class="entry">11/04/2024</td></tr></tbody></table>

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## ASC 220-40-05: 05 Overview and Background

[Read section](https://asc.understandingaccounting.org/asc/220/40/#05-overview-and-background)

SEC content: no

##### [220-40-05-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-05-1)

Pending content: yes

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Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)This Subtopic provides guidance on the disaggregation disclosure requirements for certain expense captions presented on the face of an entity’s income statement. This Subtopic also provides guidance on the disclosure of selling expenses.

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Effective as of: not established by retrieval timestamps.


## ASC 220-40-15: 15 Scope and Scope Exceptions

[Read section](https://asc.understandingaccounting.org/asc/220/40/#15-scope-and-scope-exceptions)

SEC content: no

#### Overall Guidance

##### [220-40-15-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-15-1)

Pending content: yes

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Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)This Subtopic has its own discrete scope, which is separate and distinct from the pervasive scope for this Topic as outlined in Section 220-10-15.

#### Entities

##### [220-40-15-2](https://asc.understandingaccounting.org/asc/220/40/#220-40-15-2)

Pending content: yes

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Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)The guidance in this Subtopic applies to all [public business entities](https://asc.understandingaccounting.org/glossary/p/#public-business-entity "A public business entity is a business entity meeting any one of the criteria below. Neither a not-for-profit entity nor an employee benefit plan is a business entity. It is required by the U.S. Securities and Exchange Commission (SEC) to file or furnish financial statements, or does file or furnish financial statements (including voluntary filers), with the SEC (including other entities whose financial statements or financial information are required to be or are included in a filing). It is required by the Securities Exchange Act of 1934 (the Act), as amended, or rules or regulations promulgated under the Act, to file or furnish financial statements with a regulatory agency other than the SEC. It is required to file or furnish financial statements with a foreign or domestic regulatory agency in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer. It has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market. It has one or more securities that are not subject to contractual restrictions on transfer, and it is required by law, contract, or regulation to prepare U.S. GAAP financial statements (including notes) and make them publicly available on a periodic basis (for example, interim or annual periods). An entity must meet both of these conditions to meet this criterion. An entity may meet the definition of a public business entity solely because its financial statements or financial information is included in another entity's filing with the SEC. In that case, the entity is only a public business entity for purposes of financial statements that are filed or furnished with the SEC.").

##### [220-40-15-3](https://asc.understandingaccounting.org/asc/220/40/#220-40-15-3)

Pending content: yes

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Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)The guidance in this Subtopic does not apply to the following entities:

1.  a
    
    [Private companies](https://asc.understandingaccounting.org/glossary/p/#private-company "An entity other than a public business entity, a not-for-profit entity, or an employee benefit plan within the scope of Topics 960 through 965 on plan accounting.")
    
2.  b
    
    [Not-for-profit entities](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.")
    
3.  c
    
    Employee benefit plans within the scope of any of the following Topics:
    
    1.  1
        
        Plan Accounting—Defined Benefit Pension Plans (Topic 960)
        
    2.  2
        
        Plan Accounting—Defined Contribution Pension Plans (Topic 962)
        
    3.  3
        
        Plan Accounting—Health and Welfare Benefit Plans (Topic 965).

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## ASC 220-40-50: 50 Disclosure

[Read section](https://asc.understandingaccounting.org/asc/220/40/#50-disclosure)

SEC content: no

#### Overall Guidance

##### [220-40-50-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-1)

Pending content: yes

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Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)The objective of the disclosure requirements in this Section is to provide disaggregated information about a [public business entity’s](https://asc.understandingaccounting.org/glossary/p/#public-business-entity "A public business entity is a business entity meeting any one of the criteria below. Neither a not-for-profit entity nor an employee benefit plan is a business entity. It is required by the U.S. Securities and Exchange Commission (SEC) to file or furnish financial statements, or does file or furnish financial statements (including voluntary filers), with the SEC (including other entities whose financial statements or financial information are required to be or are included in a filing). It is required by the Securities Exchange Act of 1934 (the Act), as amended, or rules or regulations promulgated under the Act, to file or furnish financial statements with a regulatory agency other than the SEC. It is required to file or furnish financial statements with a foreign or domestic regulatory agency in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer. It has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market. It has one or more securities that are not subject to contractual restrictions on transfer, and it is required by law, contract, or regulation to prepare U.S. GAAP financial statements (including notes) and make them publicly available on a periodic basis (for example, interim or annual periods). An entity must meet both of these conditions to meet this criterion. An entity may meet the definition of a public business entity solely because its financial statements or financial information is included in another entity's filing with the SEC. In that case, the entity is only a public business entity for purposes of financial statements that are filed or furnished with the SEC.") expenses to help investors:

1.  a
    
    Better understand the entity’s performance
    
2.  b
    
    Better assess the entity’s prospects for future cash flows
    
3.  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](https://asc.understandingaccounting.org/asc/220/40/#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.

##### [220-40-50-2](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-2)

Pending content: yes

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Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)This Section includes the following (all of which apply only to expenses in continuing operations):

1.  a
    
    Required expense categories to be disclosed, identification of relevant expense captions, and practical expedients (see paragraphs
    
    [220-40-50-6 through 50-20](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6)
    
    )
    
2.  b
    
    Tabular integration of other disclosure requirements (see paragraphs
    
    [220-40-50-21 through 50-25](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21)
    
    )
    
3.  c
    
    Disclosure of expense reimbursements included in a relevant expense caption (see paragraphs
    
    [220-40-50-26 through 50-29](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-26)
    
    )
    
4.  d
    
    An amount and qualitative description of the composition of other items remaining in relevant expense captions (see paragraph [220-40-50-30](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-30))
    
5.  e
    
    Disclosure of the disaggregation of relevant expense captions that contain amounts within the scope of Topic 330 on inventory (see paragraphs
    
    [220-40-50-31 through 50-34](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-31)
    
    )
    
6.  f
    
    Requirements related to selling expenses (see paragraphs
    
    [220-40-50-35 through 50-36](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-35)
    
    ).

##### [220-40-50-3](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-3)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:ee367551575847a3b9453b74fbfdcca4db9a1425ccb7dcb0eb4557808028f79b

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)The 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](https://asc.understandingaccounting.org/asc/220/40/#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

[220-40-50-21 through 50-22](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21)

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.

##### [220-40-50-4](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-4)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:cf64f79bc53e531b432cb20d4d9cbde1b57f8252da50cdf8d585e7f2a9300d40

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)The 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:

1.  a
    
    Disclose the reason for the change in the period of the change (in the interim and annual reporting periods affected by the change)
    
2.  b
    
    Recast the prior periods presented for comparative purposes, except for the requirements in paragraphs
    
    [220-40-50-22 through 50-23](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-22)
    
    , 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.

##### [220-40-50-5](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-5)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:6b354e91eeff95c3a07594da7615aad664049c1169795250bf014c4330a5cde3

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)

Some 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](https://asc.understandingaccounting.org/asc/220/40/#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.

##### [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:04c37bb35f9acb7fcac1675b9d39278fb578707a60645e416e03f58f0cd04bec

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)For 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

[220-40-50-12 through 50-13](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-12)

for guidance on identifying relevant expense captions) presented on the face of the income statement in continuing operations into the following expense categories:

1.  a
    
    Purchases of [inventory](https://asc.understandingaccounting.org/glossary/i/#inventory "The aggregate of those items of tangible personal property that have any of the following characteristics: Held for sale in the ordinary course of business In process of production for such sale To be currently consumed in the production of goods or services to be available for sale. The term inventory embraces goods awaiting sale (the merchandise of a trading concern and the finished goods of a manufacturer), goods in the course of production (work in process), and goods to be consumed directly or indirectly in production (raw materials and supplies). This definition of inventories excludes long-term assets subject to depreciation accounting, or goods which, when put into use, will be so classified. The fact that a depreciable asset is retired from regular use and held for sale does not indicate that the item should be classified as part of the inventory. Raw materials and supplies purchased for production may be used or consumed for the construction of long-term assets or other purposes not related to production, but the fact that inventory items representing a small portion of the total may not be absorbed ultimately in the production process does not require separate classification. By trade practice, operating materials and supplies of certain types of entities such as oil producers are usually treated as inventory.") (see paragraph [220-40-50-7](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-7))
    
2.  b
    
    [Employee compensation](https://asc.understandingaccounting.org/glossary/e/#employee-compensation "(P) December 16, 2026; (N) December 16, 2026220-40-65-1All forms of cash consideration (including deferred cash compensation), share-based payment arrangements, medical care benefits, pension benefits, postretirement benefits, and nonretirement postemployment benefits (including special or contractual termination benefits) given by an entity in exchange for service rendered by employees or for the termination of employment. This includes compensation cost arising from wages, salaries, profit-sharing, bonuses, one-time employee termination benefits, other postemployment benefits, employee stock ownership plans, employee share purchase plans, defined contribution plans, multiemployer plans, and any other compensation cost recognized in accordance with the guidance in Topic 710 on compensation, Topic 712 on nonretirement postemployment benefits, Topic 715 on retirement benefits, and Topic 718 on stock compensation. This also includes compulsory payments paid to the general government that confer entitlement to receive a (contingent) future social benefit, such as unemployment insurance benefits and supplements; accident, injury, and sickness benefits; old-age, disability, and survivors’ pensions; and family allowances, reimbursements for medical and hospital expenses, or provision of hospital or medical services. For defined benefit plans within the scope of Topic 715, employee compensation includes only the service cost component of net periodic pension cost and the service cost component of net periodic postretirement benefit cost.") (disclosing separately any [one-time employee termination benefits](https://asc.understandingaccounting.org/glossary/o/#one-time-employee-termination-benefits "Benefits provided to current employees that are involuntarily terminated under the terms of a one-time benefit arrangement."), if applicable, see paragraph [220-40-50-21(e)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21))
    
3.  c
    
    Depreciation (for separate requirement to disclose depreciation expense for the period in total, see paragraph [360-10-50-1(a)](https://asc.understandingaccounting.org/asc/360/10/#360-10-50-1))
    
4.  d
    
    [Intangible asset](https://asc.understandingaccounting.org/glossary/i/#intangible-assets "Assets (not including financial assets) that lack physical substance. (The term intangible assets is used to refer to intangible assets other than goodwill.)") amortization (for separate requirement to disclose intangible asset amortization expense for the period in total, see paragraph [350-30-50-2(a)(2)](https://asc.understandingaccounting.org/asc/350/30/#350-30-50-2))
    
5.  e
    
    Depreciation, depletion, and amortization of capitalized acquisition, exploration, and development costs recognized as part of [oil- and gas-producing activities](https://asc.understandingaccounting.org/glossary/o/#oil-and-gas-producing-activities "Paragraph 932-10-15-2A defines the term 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](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-11)).

##### [220-40-50-7](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-7)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:238fb1b21f56175d0f7f19958d20789100f29c14674f6660366cf2aeb611bdaa

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)Purchases 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](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-31)) the amounts recognized from any of the following:

1.  a
    
    A [business combination](https://asc.understandingaccounting.org/glossary/b/#business-combination "A transaction or other event in which an acquirer obtains control of one or more businesses. Transactions sometimes referred to as true mergers or mergers of equals also are business combinations. See also Acquisition by a Not-for-Profit Entity.") within the scope of Subtopic 805-10 on business combinations
    
2.  b
    
    A [joint venture](https://asc.understandingaccounting.org/glossary/j/#joint-venture "An entity owned and operated by a small group of businesses (the joint venturers) as a separate and specific business or project for the mutual benefit of the members of the group. A government may also be a member of the group. The purpose of a joint venture frequently is to share risks and rewards in developing a new market, product, or technology; to combine complementary technological knowledge; or to pool resources in developing production or other facilities. A joint venture also usually provides an arrangement under which each joint venturer may participate, directly or indirectly, in the overall management of the joint venture. Joint venturers thus have an interest or relationship other than as passive investors. An entity that is a subsidiary of one of the joint venturers is not a joint venture. The ownership of a joint venture seldom changes, and its equity interests usually are not traded publicly. A minority public ownership, however, does not preclude an entity from being a joint venture. As distinguished from a corporate joint venture, a joint venture is not limited to corporate entities.") formation within the scope of Subtopic 805-60 on joint venture formations
    
3.  c
    
    The initial consolidation of a [variable interest entity](https://asc.understandingaccounting.org/glossary/v/#variable-interest-entity "A legal entity subject to consolidation according to the provisions of the Variable Interest Entities Subsections of Subtopic 810-10.") that is not a business combination within the scope of Subtopic 810-10 on consolidation.
    

Amounts excluded by this paragraph shall be included in the other items category, unless separately disclosed voluntarily (see paragraph [220-40-50-30](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-30)). See paragraphs

[220-40-50-31 through 50-34](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-31)

for additional requirements for the disaggregation of relevant expense captions that contain amounts within the scope of Topic 330.

##### [220-40-50-8](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-8)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:90caa04dd81142b4b2eb883d07e265f6ad76920d0627b027159a66b96ec03dd7

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)When applying the guidance in paragraph [220-40-50-6(b)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6), 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.

##### [220-40-50-9](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-9)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:a16939facd8d656eebc23cc3fd83753e1ae0c28447b6463bfbe8d278ceb3351d

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)The amounts provided for depreciation in accordance with paragraph [220-40-50-6(c)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6) and intangible asset amortization in accordance with paragraph [220-40-50-6(d)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6) 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)](https://asc.understandingaccounting.org/asc/360/10/#360-10-50-1) and [350-30-50-2(a)(2)](https://asc.understandingaccounting.org/asc/350/30/#350-30-50-2), respectively, and with the classification of amounts described in paragraph [220-40-50-10](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-10).

##### [220-40-50-10](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-10)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:a3e249eba6b77d240c2623648ae02dfc531a78dec67ea01df8b1dfbd1c6ad172

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)Amortization of a [right-of-use asset](https://asc.understandingaccounting.org/glossary/r/#right-of-use-asset "An asset that represents a lessee's right to use an underlying asset for the lease term.") for a [finance lease](https://asc.understandingaccounting.org/glossary/f/#finance-lease "From the perspective of a lessee, a lease that meets one or more of the criteria in paragraph 842-10-25-2.") recognized in accordance with paragraphs

[842-20-35-7 through 35-8](https://asc.understandingaccounting.org/asc/842/20/#842-20-35-7)

and amortization of leasehold improvements recognized in accordance with paragraphs

[842-20-35-12 through 35-13](https://asc.understandingaccounting.org/asc/842/20/#842-20-35-12)

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)](https://asc.understandingaccounting.org/asc/842/20/#842-20-45-4)). That is, amounts shall be included as part of either depreciation in paragraph [220-40-50-6(c)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6) or intangible asset amortization in paragraph [220-40-50-6(d)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6).

##### [220-40-50-11](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-11)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:56ada55ba88c9d23285ae7cb3493c2fc9a3d319fc33709ed4b45610f748d851a

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)In determining the amounts to be disclosed in paragraph [220-40-50-6(e)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6), 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).

##### [220-40-50-12](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-12)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:f1319908c5ce0c2f342dca5e99f47bbf6222b41fa5ab3f27c8bbf50e758c618b

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)For 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](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6) (including those described in paragraphs

[220-40-50-10 through 50-11](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-10)

). A relevant expense caption that consists entirely of one expense category listed in paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#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)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6), 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)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6), respectively. Furthermore, in accordance with paragraph [220-40-50-31](https://asc.understandingaccounting.org/asc/220/40/#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](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6).

##### [220-40-50-13](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-13)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:e396c60ee28968e216929b598e1b4a4c12d196e76632dc6a95543c44ff7344fa

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)An entity’s share of earnings or losses from investments accounted for under the equity method in accordance with paragraph [323-10-45-1](https://asc.understandingaccounting.org/asc/323/10/#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)](https://asc.understandingaccounting.org/asc/323/10/#323-10-50-3).

##### [220-40-50-14](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-14)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:94bfb7ec993a1a890c5ba0135df62f5ce274809b5584af2e013f769072d07d32

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)With the exception of inventory disclosed under the cost-incurred basis described in paragraph [220-40-50-31(a)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-31), 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](https://asc.understandingaccounting.org/asc/220/40/#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](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6) based on the nature of the expense at the time that it is recognized in the income statement.

##### [220-40-50-15](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-15)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:51449a89cd92217d0f09d8ea3ea3a4e2c73e1f0d963289f6491588cae3935540

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)To illustrate the application of the requirements in paragraph [220-40-50-14](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-14), an entity is not required to further disaggregate amortization of costs to fulfill a [contract](https://asc.understandingaccounting.org/glossary/c/#contract "An agreement between two or more parties that creates enforceable rights and obligations.") with a [customer](https://asc.understandingaccounting.org/glossary/c/#customer "A party that has contracted with an entity to obtain goods or services that are an output of the entity's ordinary activities in exchange for consideration.") into the categories required by paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#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](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6).

##### [220-40-50-16](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-16)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:6f31764f2f2ba0ce915c9b00df40934bc04c3426ecc7381b4989901196c0b9ee

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)An 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](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6) if all of the following criteria are met:

1.  a
    
    The expense relates to an obligation that will be settled in the future and there is uncertainty about the timing of settlement.
    
2.  b
    
    The expense relates to an obligation that is based on an estimate of a future expenditure.
    
3.  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

[220-40-50-21 through 50-22](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21)

.

##### [220-40-50-17](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-17)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:571472bc21b7a78b2d2c0a7b579a1a027edb74fe9455315b5dce51c927c48e02

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)Examples of expenses that meet the criteria in paragraph [220-40-50-16](https://asc.understandingaccounting.org/asc/220/40/#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.

##### [220-40-50-18](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-18)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:cb48edeb146827d2aa732083bb1d160e78e14d65293f3e842b91c19c68997fe0

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)Examples of expenses that do not meet the criteria in paragraph [220-40-50-16](https://asc.understandingaccounting.org/asc/220/40/#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).

##### [220-40-50-19](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-19)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:add874c69b2f3df05ce7ead0aecd729cbfd2df1d97ac4b30d806cb836fb91508

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)As 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](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-7), the entity is not required to apply the guidance in paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#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.

##### [220-40-50-20](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-20)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:c0b9b078a8b59b09d2ef07fb4c7c78205df0f3eda591ca84af8f2ea56d512e2f

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)As a practical expedient for determining what amounts are classified as employee compensation in paragraph [220-40-50-6(b)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6), 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](https://asc.understandingaccounting.org/asc/220/942/#220-942-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.

##### [220-40-50-21](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:a03646ee62b2826232d8b7d05f59f2eb013c968c8ac7d913af967f9fecd146ae

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)An entity shall disclose, in the same tabular format disclosure in which the disclosures required by paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#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

[220-40-50-12 through 50-13](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-12)

for guidance on identifying relevant expense captions):

1.  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)](https://asc.understandingaccounting.org/asc/350/30/#350-30-50-1))
    
2.  b
    
    Impairment loss recognized related to an intangible asset (see paragraph [350-30-50-3](https://asc.understandingaccounting.org/asc/350/30/#350-30-50-3))
    
3.  c
    
    [Impairment](https://asc.understandingaccounting.org/glossary/i/#impairment "Impairment is the condition that exists when the carrying amount of a long-lived asset (asset group) exceeds its fair value.") loss of long-lived assets classified as held and used (see paragraph [360-10-50-2](https://asc.understandingaccounting.org/asc/360/10/#360-10-50-2))
    
4.  d
    
    Gain or loss recognized in accordance with paragraphs
    
    [360-10-35-37 through 35-45](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-37)
    
    and [360-10-40-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-40-5) for long-lived assets classified as held for sale or disposed of (see paragraph [360-10-50-3](https://asc.understandingaccounting.org/asc/360/10/#360-10-50-3))
    
5.  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](https://asc.understandingaccounting.org/asc/420/10/#420-10-50-1))
    
6.  f
    
    Components of net benefit cost recognized (other than service cost amounts included within employee compensation) (see paragraph [715-20-50-1(h)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1))
    
7.  g
    
    Bargain purchase gain recognized in a business combination (see paragraph [805-30-50-1(f)](https://asc.understandingaccounting.org/asc/805/30/#805-30-50-1))
    
8.  h
    
    Any gain or loss recognized upon the deconsolidation of a [subsidiary](https://asc.understandingaccounting.org/glossary/s/#subsidiary "An entity, including an unincorporated entity such as a partnership or trust, in which another entity, known as its parent, holds a controlling financial interest. (Also, a variable interest entity that is consolidated by a primary beneficiary.)") or the derecognition of a group of assets in accordance with paragraph [810-10-40-3A](https://asc.understandingaccounting.org/asc/810/10/#810-10-40-3A) (see paragraph [810-10-50-1B](https://asc.understandingaccounting.org/asc/810/10/#810-10-50-1B))
    
9.  i
    
    Gains and losses on [derivative instruments](https://asc.understandingaccounting.org/glossary/d/#derivative-instrument "Paragraphs 815-10-15-83815-10-15-84815-10-15-85815-10-15-86815-10-15-87815-10-15-88815-10-15-89815-10-15-90815-10-15-91815-10-15-92815-10-15-93815-10-15-94815-10-15-95815-10-15-96815-10-15-97815-10-15-98815-10-15-99815-10-15-100815-10-15-101815-10-15-102815-10-15-103815-10-15-104815-10-15-105815-10-15-106815-10-15-107815-10-15-108815-10-15-109815-10-15-110815-10-15-111815-10-15-112815-10-15-113815-10-15-114815-10-15-115815-10-15-116815-10-15-117815-10-15-118815-10-15-119815-10-15-120815-10-15-121815-10-15-122815-10-15-123815-10-15-124815-10-15-125815-10-15-126815-10-15-127815-10-15-128815-10-15-129815-10-15-130815-10-15-131815-10-15-132815-10-15-133815-10-15-134815-10-15-135815-10-15-136815-10-15-137815-10-15-138815-10-15-139 define the term derivative instrument.") (and nonderivative instruments that are designated and qualify as hedging instruments in accordance with paragraphs [815-20-25-58](https://asc.understandingaccounting.org/asc/815/20/#815-20-25-58) and [815-20-25-66](https://asc.understandingaccounting.org/asc/815/20/#815-20-25-66)) and related hedged items (see paragraph [815-10-50-4A](https://asc.understandingaccounting.org/asc/815/10/#815-10-50-4A))
    
10.  j
     
     Amortization of [license agreements](https://asc.understandingaccounting.org/glossary/l/#license-agreement "A typical license agreement for program material (for example, features, specials, series, or cartoons) covers several programs (a package) and grants a television station, group of stations, network, pay television, or cable television system (licensee) the right to broadcast either a specified number or an unlimited number of showings over a maximum period of time (license period) for a specified fee.") for program material (see paragraph [920-350-50-2](https://asc.understandingaccounting.org/asc/350/920/#350-920-50-2))
     
11.  k
     
     Impairment of license agreements for program material (see paragraph [920-350-50-4](https://asc.understandingaccounting.org/asc/350/920/#350-920-50-4))
     
12.  l
     
     Amortization of [film costs](https://asc.understandingaccounting.org/glossary/f/#film-costs "Film costs include all direct negative costs incurred in the physical production of a film, as well as allocations of production overhead and capitalized interest in accordance with Topic 835. Examples of direct negative costs include costs of story and scenario; compensation of cast, directors, producers, extras, and miscellaneous staff; costs of set construction and operations, wardrobe, and accessories; costs of sound synchronization; rental facilities on location; and postproduction costs such as music, special effects, and editing.") (see paragraph [926-20-50-4A](https://asc.understandingaccounting.org/asc/926/20/#926-20-50-4A))
     
13.  m
     
     Impairment of film costs (see paragraph [926-20-50-4C](https://asc.understandingaccounting.org/asc/926/20/#926-20-50-4C)).
     

These disclosures shall be included in the tabular format disclosure required by paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#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.

Transition date:(P) December 16, 2028; (N) December 16, 2029Transition guidance:

[832-10-65-2](https://asc.understandingaccounting.org/asc/832/10/#832-10-65-2)An entity shall disclose, in the same tabular format disclosure in which the disclosures required by paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#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

[220-40-50-12 through 50-13](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-12)

for guidance on identifying relevant expense captions):

1.  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)](https://asc.understandingaccounting.org/asc/350/30/#350-30-50-1))
    
2.  b
    
    Impairment loss recognized related to an intangible asset (see paragraph [350-30-50-3](https://asc.understandingaccounting.org/asc/350/30/#350-30-50-3))
    
3.  c
    
    [Impairment](https://asc.understandingaccounting.org/glossary/i/#impairment "Impairment is the condition that exists when the carrying amount of a long-lived asset (asset group) exceeds its fair value.") loss of long-lived assets classified as held and used (see paragraph [360-10-50-2](https://asc.understandingaccounting.org/asc/360/10/#360-10-50-2))
    
4.  d
    
    Gain or loss recognized in accordance with paragraphs
    
    [360-10-35-37 through 35-45](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-37)
    
    and [360-10-40-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-40-5) for long-lived assets classified as held for sale or disposed of (see paragraph [360-10-50-3](https://asc.understandingaccounting.org/asc/360/10/#360-10-50-3))
    
5.  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](https://asc.understandingaccounting.org/asc/420/10/#420-10-50-1))
    
6.  f
    
    Components of net benefit cost recognized (other than service cost amounts included within employee compensation) (see paragraph [715-20-50-1(h)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1))
    
7.  g
    
    Bargain purchase gain recognized in a business combination (see paragraph [805-30-50-1(f)](https://asc.understandingaccounting.org/asc/805/30/#805-30-50-1))
    
8.  h
    
    Any gain or loss recognized upon the deconsolidation of a [subsidiary](https://asc.understandingaccounting.org/glossary/s/#subsidiary "An entity, including an unincorporated entity such as a partnership or trust, in which another entity, known as its parent, holds a controlling financial interest. (Also, a variable interest entity that is consolidated by a primary beneficiary.)") or the derecognition of a group of assets in accordance with paragraph [810-10-40-3A](https://asc.understandingaccounting.org/asc/810/10/#810-10-40-3A) (see paragraph [810-10-50-1B](https://asc.understandingaccounting.org/asc/810/10/#810-10-50-1B))
    
9.  i
    
    Gains and losses on [derivative instruments](https://asc.understandingaccounting.org/glossary/d/#derivative-instrument "Paragraphs 815-10-15-83815-10-15-84815-10-15-85815-10-15-86815-10-15-87815-10-15-88815-10-15-89815-10-15-90815-10-15-91815-10-15-92815-10-15-93815-10-15-94815-10-15-95815-10-15-96815-10-15-97815-10-15-98815-10-15-99815-10-15-100815-10-15-101815-10-15-102815-10-15-103815-10-15-104815-10-15-105815-10-15-106815-10-15-107815-10-15-108815-10-15-109815-10-15-110815-10-15-111815-10-15-112815-10-15-113815-10-15-114815-10-15-115815-10-15-116815-10-15-117815-10-15-118815-10-15-119815-10-15-120815-10-15-121815-10-15-122815-10-15-123815-10-15-124815-10-15-125815-10-15-126815-10-15-127815-10-15-128815-10-15-129815-10-15-130815-10-15-131815-10-15-132815-10-15-133815-10-15-134815-10-15-135815-10-15-136815-10-15-137815-10-15-138815-10-15-139 define the term derivative instrument.") (and nonderivative instruments that are designated and qualify as hedging instruments in accordance with paragraphs [815-20-25-58](https://asc.understandingaccounting.org/asc/815/20/#815-20-25-58) and [815-20-25-66](https://asc.understandingaccounting.org/asc/815/20/#815-20-25-66)) and related hedged items (see paragraph [815-10-50-4A](https://asc.understandingaccounting.org/asc/815/10/#815-10-50-4A))
    
10.  j
     
     Amortization of [license agreements](https://asc.understandingaccounting.org/glossary/l/#license-agreement "A typical license agreement for program material (for example, features, specials, series, or cartoons) covers several programs (a package) and grants a television station, group of stations, network, pay television, or cable television system (licensee) the right to broadcast either a specified number or an unlimited number of showings over a maximum period of time (license period) for a specified fee.") for program material (see paragraph [920-350-50-2](https://asc.understandingaccounting.org/asc/350/920/#350-920-50-2))
     
11.  k
     
     Impairment of license agreements for program material (see paragraph [920-350-50-4](https://asc.understandingaccounting.org/asc/350/920/#350-920-50-4))
     
12.  l
     
     Amortization of [film costs](https://asc.understandingaccounting.org/glossary/f/#film-costs "Film costs include all direct negative costs incurred in the physical production of a film, as well as allocations of production overhead and capitalized interest in accordance with Topic 835. Examples of direct negative costs include costs of story and scenario; compensation of cast, directors, producers, extras, and miscellaneous staff; costs of set construction and operations, wardrobe, and accessories; costs of sound synchronization; rental facilities on location; and postproduction costs such as music, special effects, and editing.") (see paragraph [926-20-50-4A](https://asc.understandingaccounting.org/asc/926/20/#926-20-50-4A))
     
13.  m
     
     Impairment of film costs (see paragraph [926-20-50-4C](https://asc.understandingaccounting.org/asc/926/20/#926-20-50-4C))
     
14.  n
     
     The total amount of a [government grant](https://asc.understandingaccounting.org/glossary/g/#government-grant "(P) December 16, 2028; (N) December 16, 2029832-10-65-2A transfer of a monetary asset or a tangible nonmonetary asset, other than in an exchange transaction (including an exchange transaction that may be at a significant discount to fair value), from a government to an entity except for a not-for-profit entity and an employee benefit plan within the scope of Topics 960, 962, and 965 on plan accounting.") recognized during the reporting period and presented as a deduction from the related expense (see paragraphs [832-10-45-1(b)](https://asc.understandingaccounting.org/asc/832/10/#832-10-45-1), [832-10-45-3(b)](https://asc.understandingaccounting.org/asc/832/10/#832-10-45-3), and [832-10-50-3A](https://asc.understandingaccounting.org/asc/832/10/#832-10-50-3A)).
     

These disclosures shall be included in the tabular format disclosure required by paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#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.

Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:

[818-10-65-1](https://asc.understandingaccounting.org/asc/818/10/#818-10-65-1)An entity shall disclose, in the same tabular format disclosure in which the disclosures required by paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#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

[220-40-50-12 through 50-13](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-12)

for guidance on identifying relevant expense captions):

1.  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)](https://asc.understandingaccounting.org/asc/350/30/#350-30-50-1))
    
2.  b
    
    Impairment loss recognized related to an intangible asset (see paragraph [350-30-50-3](https://asc.understandingaccounting.org/asc/350/30/#350-30-50-3))
    
3.  c
    
    [Impairment](https://asc.understandingaccounting.org/glossary/i/#impairment "Impairment is the condition that exists when the carrying amount of a long-lived asset (asset group) exceeds its fair value.") loss of long-lived assets classified as held and used (see paragraph [360-10-50-2](https://asc.understandingaccounting.org/asc/360/10/#360-10-50-2))
    
4.  d
    
    Gain or loss recognized in accordance with paragraphs
    
    [360-10-35-37 through 35-45](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-37)
    
    and [360-10-40-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-40-5) for long-lived assets classified as held for sale or disposed of (see paragraph [360-10-50-3](https://asc.understandingaccounting.org/asc/360/10/#360-10-50-3))
    
5.  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](https://asc.understandingaccounting.org/asc/420/10/#420-10-50-1))
    
6.  f
    
    Components of net benefit cost recognized (other than service cost amounts included within employee compensation) (see paragraph [715-20-50-1(h)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1))
    
7.  g
    
    Bargain purchase gain recognized in a business combination (see paragraph [805-30-50-1(f)](https://asc.understandingaccounting.org/asc/805/30/#805-30-50-1))
    
8.  h
    
    Any gain or loss recognized upon the deconsolidation of a [subsidiary](https://asc.understandingaccounting.org/glossary/s/#subsidiary "An entity, including an unincorporated entity such as a partnership or trust, in which another entity, known as its parent, holds a controlling financial interest. (Also, a variable interest entity that is consolidated by a primary beneficiary.)") or the derecognition of a group of assets in accordance with paragraph [810-10-40-3A](https://asc.understandingaccounting.org/asc/810/10/#810-10-40-3A) (see paragraph [810-10-50-1B](https://asc.understandingaccounting.org/asc/810/10/#810-10-50-1B))
    
9.  i
    
    Gains and losses on [derivative instruments](https://asc.understandingaccounting.org/glossary/d/#derivative-instrument "Paragraphs 815-10-15-83815-10-15-84815-10-15-85815-10-15-86815-10-15-87815-10-15-88815-10-15-89815-10-15-90815-10-15-91815-10-15-92815-10-15-93815-10-15-94815-10-15-95815-10-15-96815-10-15-97815-10-15-98815-10-15-99815-10-15-100815-10-15-101815-10-15-102815-10-15-103815-10-15-104815-10-15-105815-10-15-106815-10-15-107815-10-15-108815-10-15-109815-10-15-110815-10-15-111815-10-15-112815-10-15-113815-10-15-114815-10-15-115815-10-15-116815-10-15-117815-10-15-118815-10-15-119815-10-15-120815-10-15-121815-10-15-122815-10-15-123815-10-15-124815-10-15-125815-10-15-126815-10-15-127815-10-15-128815-10-15-129815-10-15-130815-10-15-131815-10-15-132815-10-15-133815-10-15-134815-10-15-135815-10-15-136815-10-15-137815-10-15-138815-10-15-139 define the term derivative instrument.") (and nonderivative instruments that are designated and qualify as hedging instruments in accordance with paragraphs [815-20-25-58](https://asc.understandingaccounting.org/asc/815/20/#815-20-25-58) and [815-20-25-66](https://asc.understandingaccounting.org/asc/815/20/#815-20-25-66)) and related hedged items (see paragraph [815-10-50-4A](https://asc.understandingaccounting.org/asc/815/10/#815-10-50-4A))
    
10.  j
     
     Amortization of [license agreements](https://asc.understandingaccounting.org/glossary/l/#license-agreement "A typical license agreement for program material (for example, features, specials, series, or cartoons) covers several programs (a package) and grants a television station, group of stations, network, pay television, or cable television system (licensee) the right to broadcast either a specified number or an unlimited number of showings over a maximum period of time (license period) for a specified fee.") for program material (see paragraph [920-350-50-2](https://asc.understandingaccounting.org/asc/350/920/#350-920-50-2))
     
11.  k
     
     Impairment of license agreements for program material (see paragraph [920-350-50-4](https://asc.understandingaccounting.org/asc/350/920/#350-920-50-4))
     
12.  l
     
     Amortization of [film costs](https://asc.understandingaccounting.org/glossary/f/#film-costs "Film costs include all direct negative costs incurred in the physical production of a film, as well as allocations of production overhead and capitalized interest in accordance with Topic 835. Examples of direct negative costs include costs of story and scenario; compensation of cast, directors, producers, extras, and miscellaneous staff; costs of set construction and operations, wardrobe, and accessories; costs of sound synchronization; rental facilities on location; and postproduction costs such as music, special effects, and editing.") (see paragraph [926-20-50-4A](https://asc.understandingaccounting.org/asc/926/20/#926-20-50-4A))
     
13.  m
     
     Impairment of film costs (see paragraph [926-20-50-4C](https://asc.understandingaccounting.org/asc/926/20/#926-20-50-4C))
     
14.  n
     
     The total amount of a [government grant](https://asc.understandingaccounting.org/glossary/g/#government-grant "(P) December 16, 2028; (N) December 16, 2029832-10-65-2A transfer of a monetary asset or a tangible nonmonetary asset, other than in an exchange transaction (including an exchange transaction that may be at a significant discount to fair value), from a government to an entity except for a not-for-profit entity and an employee benefit plan within the scope of Topics 960, 962, and 965 on plan accounting.") recognized during the reporting period and presented as a deduction from the related expense (see paragraphs [832-10-45-1(b)](https://asc.understandingaccounting.org/asc/832/10/#832-10-45-1), [832-10-45-3(b)](https://asc.understandingaccounting.org/asc/832/10/#832-10-45-3), and [832-10-50-3A](https://asc.understandingaccounting.org/asc/832/10/#832-10-50-3A))
     
15.  o
     
     Total expense recognized for [environmental credits](https://asc.understandingaccounting.org/glossary/e/#environmental-credit "(P) December 16, 2027; (N) December 16, 2028818-10-65-1An enforceable right that is acquired, internally generated, granted by a regulatory agency or its designee(s), or received in a nonreciprocal transfer that is not a grant from a regulator or its designee(s) that meets all of the following criteria:Lacks physical substance and is not a financial asset.Is represented to prevent, control, reduce, or remove emissions or other pollution.Is, or previously was, separately transferable in an exchange transaction. If an item is no longer separately transferable in an exchange transaction, an entity must be able to use that item to satisfy an environmental credit obligation to meet this criterion.Is not an income tax credit that may be used to settle an entity’s income tax liability, regardless of whether the entity has a tax liability or intends to use the credit for that purpose.An environmental credit that meets the above criteria may exist in a variety of forms, including (but not limited to) credits, certificates, allowances, and offsets.") not initially recognized as an asset in accordance with paragraph [818-20-25-1](https://asc.understandingaccounting.org/asc/818/20/#818-20-25-1) or subsequently derecognized in accordance with paragraph [818-20-40-2](https://asc.understandingaccounting.org/asc/818/20/#818-20-40-2) (see paragraph [818-20-50-3(a)](https://asc.understandingaccounting.org/asc/818/20/#818-20-50-3))
     
16.  p
     
     Total impairment expense recognized during the reporting period relating to environmental credits (see paragraph [818-20-50-3(b)](https://asc.understandingaccounting.org/asc/818/20/#818-20-50-3))
     
17.  q
     
     Total expense recognized for [environmental credit obligation](https://asc.understandingaccounting.org/glossary/e/#environmental-credit-obligation "(P) December 16, 2027; (N) December 16, 2028818-10-65-1A regulatory compliance obligation arising from existing or enacted laws, statutes, or ordinances represented to prevent, control, reduce, or remove emissions or other pollution that may be settled with environmental credits. Obligations within the scope of Subtopic 410-30 are not environmental credit obligations.") liabilities (see paragraph [818-30-50-3](https://asc.understandingaccounting.org/asc/818/30/#818-30-50-3)).
     

These disclosures shall be included in the tabular format disclosure required by paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#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.

##### [220-40-50-22](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-22)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:e55dd553a5ea15f13a1127c7a8437df3fbb952dbd1d85152b3a0373ff265912e

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)An entity shall disclose, in the same tabular format disclosure in which the disclosures required by paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#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

[220-40-50-12 through 50-13](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-12)

for guidance on identifying relevant expense captions):

1.  a
    
    Provision for expected credit losses (see paragraphs [326-20-50-13](https://asc.understandingaccounting.org/asc/326/20/#326-20-50-13) and [326-30-50-9](https://asc.understandingaccounting.org/asc/326/30/#326-30-50-9))
    
2.  b
    
    Losses on firm purchase commitments (see paragraph [330-10-50-5](https://asc.understandingaccounting.org/asc/330/10/#330-10-50-5))
    
3.  c
    
    Amortization expense attributable to the expiration of an insurance or [reinsurance](https://asc.understandingaccounting.org/glossary/r/#reinsurance "A transaction in which a reinsurer (assuming entity), for a consideration (premium), assumes all or part of a risk undertaken originally by another insurer (ceding entity). For indemnity reinsurance, the legal rights of the insured are not affected by the reinsurance transaction and the insurance entity issuing the insurance contract remains liable to the insured for payment of policy benefits. Assumption or novation reinsurance contracts that are legal replacements of one insurer by another extinguish the ceding entity's liability to the policyholder.") coverage provided under a contract that transfers only significant [underwriting risk](https://asc.understandingaccounting.org/glossary/u/#underwriting-risk "The risk arising from uncertainties about the ultimate amount of net cash flows from premiums, commissions, claims, and claim settlement expenses paid under a contract.") (see paragraph [340-30-50-2](https://asc.understandingaccounting.org/asc/340/30/#340-30-50-2))
    
4.  d
    
    Amortization of costs to fulfill a contract with a customer (see paragraph [340-40-50-3](https://asc.understandingaccounting.org/asc/340/40/#340-40-50-3))
    
5.  e
    
    Impairment of costs to fulfill a contract with a customer (see paragraph [340-40-50-3](https://asc.understandingaccounting.org/asc/340/40/#340-40-50-3))
    
6.  f
    
    Amortization of costs to obtain a contract with a customer (see paragraph [340-40-50-3](https://asc.understandingaccounting.org/asc/340/40/#340-40-50-3))
    
7.  g
    
    Impairment of costs to obtain a contract with a customer (see paragraph [340-40-50-3](https://asc.understandingaccounting.org/asc/340/40/#340-40-50-3))
    
8.  h
    
    Amortization of capitalized implementation costs of [hosting arrangements](https://asc.understandingaccounting.org/glossary/h/#hosting-arrangement "In connection with accessing and using software products, an arrangement in which the customer of the software does not currently have possession of the software; rather, the customer accesses and uses the software on an as-needed basis.") that are service contracts (see paragraph [350-40-50-3](https://asc.understandingaccounting.org/asc/350/40/#350-40-50-3))
    
9.  i
    
    [Asset retirement obligation](https://asc.understandingaccounting.org/glossary/a/#asset-retirement-obligation "An obligation associated with the retirement of a tangible long-lived asset.")[accretion expense](https://asc.understandingaccounting.org/glossary/a/#accretion-expense "An amount recognized as an expense classified as an operating item in the statement of income resulting from the increase in the carrying amount of the liability associated with the asset retirement obligation.") (see paragraph [410-20-50-1](https://asc.understandingaccounting.org/asc/410/20/#410-20-50-1))
    
10.  j
     
     [Loss contingencies](https://asc.understandingaccounting.org/glossary/l/#loss-contingency "An existing condition, situation, or set of circumstances involving uncertainty as to possible loss to an entity that will ultimately be resolved when one or more future events occur or fail to occur. The term loss is used for convenience to include many charges against income that are commonly referred to as expenses and others that are commonly referred to as losses.") recognized (see paragraph [450-20-50-1](https://asc.understandingaccounting.org/asc/450/20/#450-20-50-1))
     
11.  k
     
     [Warranty](https://asc.understandingaccounting.org/glossary/w/#warranty "A guarantee for which the underlying is related to the performance (regarding function, not price) of nonfinancial assets that are owned by the guaranteed party. The obligation may be incurred in connection with the sale of goods or services; if so, it may require further performance by the seller after the sale has taken place.") 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](https://asc.understandingaccounting.org/asc/460/10/#460-10-50-8))
     
12.  l
     
     Expense related to counterparty default in own-share lending arrangements issued in contemplation of convertible debt issuance (see paragraph [470-20-50-2C](https://asc.understandingaccounting.org/asc/470/20/#470-20-50-2C))
     
13.  m
     
     Aggregate gain on restructuring of payables by a debtor with a [troubled debt restructuring](https://asc.understandingaccounting.org/glossary/t/#troubled-debt-restructuring "A restructuring of a debt constitutes a troubled debt restructuring if the creditor for economic or legal reasons related to the debtor's financial difficulties grants a concession to the debtor that it would not otherwise consider.") (see paragraph [470-60-50-1](https://asc.understandingaccounting.org/asc/470/60/#470-60-50-1))
     
14.  n
     
     Gains and losses upon consolidation of a variable interest entity that is not a business (see paragraph [810-10-50-3](https://asc.understandingaccounting.org/asc/810/10/#810-10-50-3))
     
15.  o
     
     Foreign currency [transaction gains or losses](https://asc.understandingaccounting.org/glossary/t/#transaction-gain-or-loss "Transaction gains or losses result from a change in exchange rates between the functional currency and the currency in which a foreign currency transaction is denominated. They represent an increase or decrease in both of the following: The actual functional currency cash flows realized upon settlement of foreign currency transactions The expected functional currency cash flows on unsettled foreign currency transactions.") (see paragraph [830-20-50-1](https://asc.understandingaccounting.org/asc/830/20/#830-20-50-1))
     
16.  p
     
     [Operating lease](https://asc.understandingaccounting.org/glossary/o/#operating-lease "From the perspective of a lessee, any lease other than a finance lease. From the perspective of a lessor, any lease other than a sales-type lease or a direct financing lease.") cost (see paragraph [842-20-50-4](https://asc.understandingaccounting.org/asc/842/20/#842-20-50-4))
     
17.  q
     
     [Short-term lease](https://asc.understandingaccounting.org/glossary/s/#short-term-lease "A lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise.") cost (see paragraph [842-20-50-4](https://asc.understandingaccounting.org/asc/842/20/#842-20-50-4))
     
18.  r
     
     Variable lease cost (see paragraph [842-20-50-4](https://asc.understandingaccounting.org/asc/842/20/#842-20-50-4))
     
19.  s
     
     Net gain or loss recognized from sale and leaseback transactions (see paragraph [842-20-50-4](https://asc.understandingaccounting.org/asc/842/20/#842-20-50-4))
     
20.  t
     
     Gains and losses from nonmonetary transactions (see paragraph [845-10-50-1](https://asc.understandingaccounting.org/asc/845/10/#845-10-50-1))
     
21.  u
     
     Amortization of capitalized [acquisition costs](https://asc.understandingaccounting.org/glossary/a/#acquisition-costs "Costs that are related directly to the successful acquisition of new or renewal insurance contracts.") (see paragraph [944-30-50-1(c)](https://asc.understandingaccounting.org/asc/944/30/#944-30-50-1)).
     

These disclosures shall be included in the tabular format disclosure required by paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#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.

##### [220-40-50-23](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-23)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:df4a45bc12b7d884cf1dcfad807f86b202ab154f1ee0b19715f74b9f8c53a3d8

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)If there is a change in facts and circumstances that results in an item listed in paragraph [220-40-50-22](https://asc.understandingaccounting.org/asc/220/40/#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](https://asc.understandingaccounting.org/asc/205/10/#205-10-50-1).

##### [220-40-50-24](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-24)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:ff3adff96806ded6dfbc9c5db507437d26c4e01a6bf3e13c201ad459c36079f5

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)The presence of the expenses, gains, and losses listed in paragraphs

[220-40-50-21 through 50-22](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21)

would not cause an expense caption to be a relevant expense caption. An entity only shall include the applicable expenses listed in paragraphs

[220-40-50-21 through 50-22](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21)

in the tabular format disclosures if an expense caption is a relevant expense caption in accordance with paragraphs

[220-40-50-12 through 50-13](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-12)

.

##### [220-40-50-25](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-25)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:9a6531e7b831a34587e4a84c69b148a54b9433b8f337d5fb2318a3656a5e4e5b

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)To illustrate the application of the requirements in paragraph [220-40-50-22](https://asc.understandingaccounting.org/asc/220/40/#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)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6)) 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](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6).

##### [220-40-50-26](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-26)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:f773f2d056d8e526054ec1d6c921149b4b7a37ce27139c7fd9d30708303270b6

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)For 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](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6) are provided, shall either:

1.  a
    
    Separately disclose the amount of the expense reimbursement
    
2.  b
    
    Disclose the amounts of the expense categories required by paragraphs [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6) and
    
    [220-40-50-21 through 50-22](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21)
    
    that are included in the relevant expense caption net of any reimbursement effects.

##### [220-40-50-27](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-27)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:79c89ace39eff6f64442b828bdb6e757d09d5cf899bf5baac96a2b5359285ee4

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)For 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](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-26).

##### [220-40-50-28](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-28)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:6438d287654a449db2264443139afb502ddfa688432e78d76e68a07114e78dd6

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)For 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](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6) are provided.

##### [220-40-50-29](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-29)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:2a29a5d6febd280db392978b2ce0d995de775e20a3b808a93690bc69909a75e6

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)For interim and annual reporting periods, when applying the guidance in paragraph [220-40-50-26(a)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-26) or [220-40-50-28](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-28), an entity shall disclose qualitative descriptions of the expense categories (based on their [natural expense classification](https://asc.understandingaccounting.org/glossary/n/#natural-expense-classification "A method of grouping expenses according to the kinds of economic benefits received in incurring those expenses. Examples of natural expense classifications include salaries and wages, employee benefits, professional services, supplies, interest expense, rent, utilities, and depreciation. (P) December 16, 2026; (N) December 16, 2026220-40-65-1A method of grouping expenses according to the types of economic benefits received in incurring those expenses. Examples of natural expense classifications include salaries and wages, employee benefits, nonemployee professional services, supplies, interest expense, rent, utilities, and depreciation.")) to which an expense reimbursement relates.

##### [220-40-50-30](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-30)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:8dac197cbb09b163b8265b498ac19314fd1ff3999c2e466af2508061584ec674

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)For interim and annual reporting periods, an entity, in the same tabular format disclosure in which the disclosures required by paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#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:

1.  a
    
    The amount of the relevant expense caption presented on the face of the income statement
    
2.  b
    
    The aggregate amount of expense categories separately disclosed in accordance with paragraphs [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6),
    
    [220-40-50-21 through 50-22](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21)
    
    , [220-40-50-26(a)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-26), and [220-40-50-28](https://asc.understandingaccounting.org/asc/220/40/#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](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6),

[220-40-50-21 through 50-22](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21)

, [220-40-50-26(a)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-26), and [220-40-50-28](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-28).

##### [220-40-50-31](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-31)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:d7bfda7d64873f1612fa62226af7d25aa59600a7dec212c10a62b734da66719c

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)The 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:

1.  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
    
    [220-40-50-32 through 50-34](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-32)
    
    ).
    
2.  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](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6).

##### [220-40-50-32](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-32)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:060baccd77f43014b4586c3bc6916a8c0ff0215e7961ec906a362fc8d9d4b4ee

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)When the amounts disclosed in accordance with paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#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))](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-31), 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](https://asc.understandingaccounting.org/asc/220/40/#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.

##### [220-40-50-33](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-33)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:e644b260e29c9ccca0ddaa9fa6acfac8d7627e84906cb1026cd6a18ac547643d

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)In addition to the changes in inventories category described in paragraph [220-40-50-32](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-32), for interim and annual reporting periods, under the cost-incurred basis (see paragraph [220-40-50-31(a)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-31)), 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:

1.  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)
    
2.  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.

##### [220-40-50-34](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-34)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:832b336547e12d10ed1e4e12c8cbf11503f54da02450bbb010344e619a964e28

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)Consistent with the requirements in paragraph [220-40-50-30](https://asc.understandingaccounting.org/asc/220/40/#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](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-33).

##### [220-40-50-35](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-35)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:00ad5185ddad6698324a4f3a45b3add1a16eb35a3b8791d1e8f12cb443a571b7

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)For interim and annual reporting periods, an entity shall disclose, in the notes to financial statements, the total selling expenses recognized in continuing operations.

##### [220-40-50-36](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-36)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:04.139Z to 2026-09-09T23:05:04.139Z

Record version: sha256:4381b612f4e853a306733227267a5169a53ed345512cafcd6158b7cbe6d4de6d

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)An 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).

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:e6cb68e029068ec1c1ba98f50d19061506f96157ef7205c4b920bc413197968f

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


## ASC 220-40-55: 55 Implementation Guidance and Illustrations

[Read section](https://asc.understandingaccounting.org/asc/220/40/#55-implementation-guidance-and-illustrations)

SEC content: no

##### [220-40-55-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-1)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:e9fa159760d029f191cfad4b58e255ba8216afed07cc1d3882c618cdeff878af

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)This Section is an integral part of the requirements of this Subtopic. This Section provides additional guidance and illustrations of the disaggregation of income statement expenses and other disclosures required by paragraphs

[220-40-50-1 through 50-36](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-1)

. The illustrations are intended as examples only and do not represent a required format for the disclosures. Furthermore, there may be incremental disclosure guidance otherwise applicable to an item or amount under other generally accepted accounting principles, which has not been illustrated in this Section. Paragraphs [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6),

[220-40-50-21 through 50-22](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21)

, [220-40-50-26](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-26), [220-40-50-28](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-28), and

[220-40-50-30 through 50-33](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-30)

require that an entity provide certain disclosures in a tabular format disclosure.

#### Implementation Guidance

##### [220-40-55-2](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-2)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:914a2e2c0865a9132d47140d925088f7cdf2bda8076fbb05ba58c4786789bf26

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)Application of the guidance in this Subtopic might cause an entity to pursue a degree of detail in recordkeeping and computations that could be burdensome as well as unnecessary to produce a reasonable approximation of the results. Accordingly, an entity may use estimates or other methods that produce a reasonable approximation of the amounts required to be disclosed by this Subtopic.

#### Illustrations

##### [220-40-55-3](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-3)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:cda4d20bb2635c749400ee2137ecd3bbc3b7b6798c3a5a943e546c24c6bfe057

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)This Example illustrates one type of tabular format disclosure that an entity could use to disclose disaggregated expense amounts in accordance with paragraphs

[220-40-50-1 through 50-34](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-1)

. This Example also illustrates the disclosure of selling expenses in accordance with paragraphs

[220-40-50-35 through 50-36](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-35)

.

##### [220-40-55-4](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-4)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:f6aaba8c13c73d81dbeb732008971ecd0268cadbed046b09de66215547c06686

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)For the year ended December 31, 20X4, Entity X, which is a manufacturer with significant service operations, presents the following comparative income statement.

-   ![](https://asc.understandingaccounting.org/asc-img/GUID-63637395-418C-414D-B9D2-827AEBF0AE5C-low.gif)
    
    "Entity X Consolidated Income Statement For the Years Ended December 31, 20X4, 20X3, and 20X2" 20X4 20X3 20X2 Revenues: Products " $82,144 " " $79,137 " " $75,180 " Services "26,132" "23,146" "21,989" Total revenues " 108,276 " " 102,283 " " 97,169 " Operating expenses: Cost of products sold "63,456" "60,898" "57,244" Cost of services " 10,496 " " 9,568 " "8,898" "Selling, general, and administrative" " 20,849 " " 18,871 " "18,116" Total operating expenses " 94,801 " " 89,337 " " 84,258 " Operating income " 13,475 " " 12,946 " " 12,911 " Interest expense "4,971" "4,213" "4,297" Income before income taxes " 8,504 " " 8,733 " " 8,614 " Income tax expense "1,786" "1,834" "1,809" Net income " $6,718 " " $6,899 " " $6,805 "

##### [220-40-55-5](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-5)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:cadd5fba24e753f93ad66cbdb9f54362c768d9797c4f8ee3682c3287301f75ee

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)Entity X provides a disclosure that disaggregates the cost of products sold; cost of services; and selling, general, and administrative expense captions into the categories listed in paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6). Those expense captions were identified as relevant expense captions because those captions contain one or more of the expense categories listed in paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6). Even though Entity X presents other expense captions on the face of its consolidated income statement, such as interest expense and income tax expense, those expense captions do not contain any of the expense categories listed in paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6) (including those described in paragraphs

[220-40-50-10 through 50-11](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-10)

); therefore, those expense captions do not need to be disaggregated.

##### [220-40-55-6](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-6)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:b060e291b19db2e1f9f9bcfd65ca059282d7c57f3cecc0e5940e3ade060dbba7

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)Because cost of products sold contains amounts related to inventory within the scope of Topic 330, Entity X may elect to disclose the amounts under a cost-incurred basis or expense-incurred basis. In this Example, Entity X chooses to disclose the disaggregation of cost of products sold on a cost-incurred basis (that is, the amounts disclosed include costs incurred that were capitalized to inventory during the current reporting period and costs incurred that were directly expensed during the current reporting period) in accordance with paragraph [220-40-50-31(a)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-31). Because Entity X discloses the required expense categories using a cost-incurred basis, the entity discloses the changes in inventories caption and the other adjustments and reconciling items caption in accordance with paragraphs

[220-40-50-32 through 50-33](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-32)

. In accordance with paragraph [220-40-50-34](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-34), Entity X qualitatively describes the nature of amounts included in other adjustments and reconciling items. If Entity X had instead disclosed the required expense categories on an expense-incurred basis (that is, the amounts disclosed 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) in accordance with paragraph [220-40-50-31(b)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-31), then the changes in inventories caption and the other adjustments and reconciling items caption would not be necessary in the disaggregation disclosure.

##### [220-40-55-7](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-7)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:bd9a2305dd3065474545956a9aa4544f9d8c7242b686af86b140fd2937e348da

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)Entity X also recognizes [impairment](https://asc.understandingaccounting.org/glossary/i/#impairment "Impairment is the condition that exists when the carrying amount of a long-lived asset (asset group) exceeds its fair value.") of property, plant, and equipment classified as held and used in selling, general, and administrative expenses and, therefore, includes that impairment as a separate category in the tabular format disclosure in accordance with paragraph [220-40-50-21(c)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21).

##### [220-40-55-8](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-8)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:6f656116f26e82121d717cc2d66f9385753762847876c1ec8cda826e1414fb9c

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)Entity X recognizes expenses associated with [warranty](https://asc.understandingaccounting.org/glossary/w/#warranty "A guarantee for which the underlying is related to the performance (regarding function, not price) of nonfinancial assets that are owned by the guaranteed party. The obligation may be incurred in connection with the sale of goods or services; if so, it may require further performance by the seller after the sale has taken place.") accruals entirely within cost of products sold and, therefore, includes warranty expense as a separate category in accordance with paragraph [220-40-50-22(k)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-22).

##### [220-40-55-9](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-9)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:505e058869c22c05e2a7f2e88918e3188e46f2ca558ca901ef0c007f9cc12084

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)Entity X recognizes [operating lease](https://asc.understandingaccounting.org/glossary/o/#operating-lease "From the perspective of a lessee, any lease other than a finance lease. From the perspective of a lessor, any lease other than a sales-type lease or a direct financing lease.") costs in both cost of services and selling, general, and administrative expenses. Therefore, in accordance with paragraph [220-40-50-22](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-22), Entity X is not required to separately disclose the amounts of cost of services and selling, general, and administrative expenses that are attributable to operating lease cost. Instead, those expenses are included in the amount for other items for each relevant expense caption in accordance with paragraph [220-40-50-30](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-30).

##### [220-40-55-10](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-10)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:bf9ab95d115ff9093fceff325d7485fa3bad3761b196f6705fa0797f726e0150

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)Entity X recognizes amounts related to the initial recognition and subsequent measurement of a liability for an environmental obligation in cost of products sold (see Subtopic 410-30 on asset retirement and environmental obligations). In accordance with paragraph [220-40-50-16](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-16), Entity X is not required to disaggregate that amount into the expense categories listed in paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6). Instead, that expense is included in the amount for other items in accordance with paragraph [220-40-50-30](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-30).

##### [220-40-55-11](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-11)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:25a0a13206f64aa5ae727c23b9a988c32dea27c401855ad8696e7fcd54152200

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)Entity X provides the following disclosure.

-   ![](https://asc.understandingaccounting.org/asc-img/GUID-D773165C-2E13-4315-AA98-3F4F6E2A8BC4-low.gif)
    
    Disaggregation of Relevant Expense Captions Cost of products sold Cost of products sold 20X4 20X3 20X2 Purchases of inventory " $20,213 " " $19,199 " " $16,319 " Employee compensation "17,578" "16,539" "14,078" Depreciation " 10,190 " " 9,989 " " 9,650 " Intangible asset amortization "3,914" "4,050" "3,929" Warranty expense " 4,394 " " 3,952 " " 3,894 " Other cost of products sold (a) "7,552" "7,606" "7,993" Changes in inventories 157 (861) 843 Other adjustments and reconciling items (b) (542) 424 538 Total cost of products sold " $63,456 " " $60,898 " " $57,244 " TRUE TRUE TRUE (a) "Other cost of products sold consists primarily of amounts paid to carriers for outbound freight services related to contract fulfillment and amounts related to the measurement of a liability for an environmental obligation for the years ended December 31, 20X4, 20X3, and 20X2. Year ended December 31, 20X4, also includes inventory amounts recognized as part of a business combination." (b) "Other adjustments and reconciling items consist of reconciling adjustments attributable to differences in the foreign exchange rates used to translate beginning inventory, ending inventory, and costs incurred from various functional currencies into the reporting currency for the years ended December 31, 20X4, 20X3, and 20X2. " Cost of services Cost of services Employee compensation " $6,598 " " $5,654 " " $4,354 " Depreciation 763 765 742 Intangible asset amortization 642 670 650 Other cost of services (c) "2,493" "2,479" "3,152" Total cost of services " $10,496 " " $9,568 " " $8,898 " (c) "Other cost of services consists primarily of operating lease and travel expenses for the years ended December 31, 20X4, 20X3, and 20X2." "Selling, general, and administrative" "Selling, general, and administrative (SG&A)" Employee compensation " $13,242 " " $11,379 " " $10,764 " Depreciation " 1,454 " " 1,755 " " 1,737 " "Property, plant, and equipment impairment" 412 - - Intangible asset amortization 523 596 - Other SG&A (d) "5,218" "5,141" "5,615" Total SG&A " $20,849 " " $18,871 " " $18,116 " (d) "Other SG&A consists primarily of professional services fees and operating lease expense for the years ended December 31, 20X4, 20X3, and 20X2."

##### [220-40-55-12](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-12)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:b7fc62cad177d043795cbb5c3d1f47faddbd697a881dcdeefc344633dd43d10c

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)In addition to the tabular format disclosure illustrated in paragraph [220-40-55-11](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-11), Entity X also must disclose its selling expenses and how it defines selling expenses in accordance with paragraphs

[220-40-50-35 through 50-36](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-35)

.

-   _Selling Expenses_
    
-   During the years ended December 31, 20X4, 20X3, and 20X2, selling expenses were $13,425, $12,123, and $11,585, respectively. The entity’s selling expenses include those expenses related to marketing and promotional activities and client relationship management.

##### [220-40-55-13](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-13)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:f053f74039c010f36a6ef11b2f121ca4ecc96bb7ee62c9e1cd821ec65105ce6d

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)This Example illustrates one type of tabular format disclosure that an entity could use to disclose disaggregated expense amounts in accordance with paragraphs

[220-40-50-1 through 50-34](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-1)

. This Example also illustrates the disclosure of selling expenses in accordance with paragraphs

[220-40-50-35 through 50-36](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-35)

.

##### [220-40-55-14](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-14)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:a976a0ef2839d8f237ff0d332726834bbcb450b4bf84378b62af08bd3861289a

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)For the year ended December 31, 20X4, Entity X, which is a services provider, presents the following comparative income statement.

-   ![](https://asc.understandingaccounting.org/asc-img/GUID-D01A4FDB-0922-4D2F-ACC8-1C4E155B73D3-low.gif)
    
    "Entity X Consolidated Income Statement For the Years Ended December 31, 20X4, 20X3, and 20X2" 20X4 20X3 20X2 Revenues " $737,132 " " $710,146 " " $694,180 " Cost of sales (exclusive of depreciation and amortization shown separately below) "140,055" "170,435" "145,778" Depreciation and amortization related to cost of sales " 31,578 " " 26,178 " "23,628" "Selling, general, and administrative expenses" " 497,962 " " 458,215 " " 471,626 " Research and development expenses " 57,235 " " 52,174 " "48,898" Operating income " 10,302 " " 3,144 " " 4,250 " Interest expense "3,145" "2,665" "2,297" Income before income taxes " 7,157 " 479 " 1,953 " Income tax expense "1,503" 101 410 Net income " $5,654 " $378 " $1,543 "

##### [220-40-55-15](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-15)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:be8a8d78e3f670777f230c9c6e567cd607b9586c22a30cb625a49eb8caecc333

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)Entity X provides a disclosure that disaggregates the cost of sales; depreciation and amortization; selling, general, and administrative expenses; and research and development expenses captions into the categories listed in paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6). Those expense captions were identified as relevant expense captions because those captions contain one or more of the expense categories listed in paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6). Even though Entity X presents other expense captions on the face of its consolidated income statement, such as interest expense and income tax expense, those expense captions do not contain any of the expense categories listed in paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6) (including those described in paragraphs

[220-40-50-10 through 50-11](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-10)

); therefore, those expense captions do not need to be disaggregated.

##### [220-40-55-16](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-16)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:e4c331c8c80f164f392c80df50d9d882ed69db1a4a5e4b68e6f43ba8477f17d9

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)Entity X also recognizes [one-time employee termination benefits](https://asc.understandingaccounting.org/glossary/o/#one-time-employee-termination-benefits "Benefits provided to current employees that are involuntarily terminated under the terms of a one-time benefit arrangement.") in cost of sales; selling, general, and administrative expenses; and research and development expenses and, therefore, includes this amount as a separate category in the tabular format disclosure in accordance with paragraph [220-40-50-21](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21). Paragraph [220-40-50-21(e)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21) requires that an entity disclose the amount of each major type of cost associated with an exit or disposal activity (for example, one-time employee termination benefits) that is recognized in each relevant expense caption in the same tabular format in which the disclosures required by paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6) are provided. Because one-time employee termination benefits are a form of employee compensation, Entity X discloses that its employee compensation category excludes one-time employee termination benefits because one-time employee termination benefits are disclosed as a separate category.

##### [220-40-55-17](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-17)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:4994ee6454d479df2701d69375937ac29e66c5e645bb3ef1e232a7f7e98c74ff

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)Entity X has a funded research and development cost-sharing arrangement with a strategic partner. Entity X recognizes an expense reimbursement from the strategic partner in research and development expenses and, in accordance with paragraph [220-40-50-26(a)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-26), elects to separately disclose the amount of that expense reimbursement. If Entity X had elected to present a relevant expense caption net of an expense reimbursement from another entity, it would have been required to disclose the amount of the expense categories that are included in each relevant expense caption. Additionally, in accordance with paragraph [220-40-50-29](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-29), Entity X qualitatively describes the expense categories to which the reimbursement relates.

##### [220-40-55-18](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-18)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:9c5a05a8ffcddadf76c5f318095b5563e68b7c3054eb727b39de34d640c7e679

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)Entity X provides the following disclosure.

-   ![](https://asc.understandingaccounting.org/asc-img/GUID-AC756D2C-3F46-42A3-A973-E428105C3372-low.gif)
    
    Disaggregation of Relevant Expense Captions Cost of sales Cost of sales 20X4 20X3 20X2 Employee compensation (exclusive of one-time employee termination benefits) " $86,336 " " $83,903 " " $100,009 " One-time employee termination benefits " 7,434 " " 39,298 " - Other cost of sales (a) "46,285" "47,234" "45,769" Total cost of sales " $140,055 " " $170,435 " " $145,778 " (a) "Other cost of sales consist primarily of subcontractor costs and travel expenses for the years ended December 31, 20X4, 20X3, and 20X2." Depreciation and amortization related to cost of sales Depreciation and amortization related to cost of sales Depreciation " $19,126 " " $17,984 " " $17,893 " Intangible asset amortization " 12,452 " " 8,194 " " 5,735 " Total depreciation and amortization related to cost of sales " $31,578 " " $26,178 " " $23,628 " "Selling, general, and administrative expenses" "Selling, general, and administrative expenses (SG&A)" Employee compensation (exclusive of one-time employee termination benefits) " $278,859 " " $238,272 " " $301,841 " One-time employee termination benefits " 19,243 " " 60,635 " - Other SG&A (b) "199,860" "159,308" "169,785" Total SG&A " $497,962 " " $458,215 " " $471,626 " (b) "Other SG&A consists primarily of professional services fees and the costs paid to third parties for printing, publications, and advertising for the years ended December 31, 20X4, 20X3, and 20X2." Research and development expenses Research and development expenses (R&D) Employee compensation (exclusive of one-time employee termination benefits) " $46,242 " " $41,379 " " $40,764 " One-time employee termination benefits " 1,454 " " 1,855 " - Other R&D (c) "17,836" "16,845" "15,890" Cost reimbursements (d) "(8,297)" "(7,905)" "(7,756)" Total R&D " $57,235 " " $52,174 " " $48,898 " (c) "Other R&D consists primarily of payments to third parties for professional services and licenses of intellectual property for the years ended December 31, 20X4, 20X3, and 20X2." (d) "Cost reimbursements consist of payments from a strategic partner for employee compensation and materials costs related to R&D incurred as part of a funded research and development arrangement for the years ended December 31, 20X4, 20X3, and 20X2."

##### [220-40-55-19](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-19)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:b0084c51691c657a8006ef105df4167f0209b73c987d26ee498143c562f5a23d

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)In addition to the tabular format disclosure illustrated in paragraph [220-40-55-18](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-18), Entity X also must disclose its selling expenses and how it defines selling expenses in accordance with paragraphs

[220-40-50-35 through 50-36](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-35)

.

-   _Selling Expenses_
    
-   During the years ended December 31, 20X4, 20X3, and 20X2, selling expenses were $224,536, $223,493, and $231,892, respectively. The entity’s selling expenses include those expenses related to advertising and certain customer acquisition-related costs.

##### [220-40-55-20](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-20)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:724ee6f340c6cce66e2ab0048b7b92ac0b5b05c60a1d3a0c5b0f2eef4a37f242

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)This Example illustrates one type of tabular format disclosure that an entity could use to disclose disaggregated expense amounts in accordance with paragraphs

[220-40-50-1 through 50-34](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-1)

. This Example also illustrates the disclosure of selling expenses in accordance with paragraphs

[220-40-50-35 through 50-36](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-35)

.

##### [220-40-55-21](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-21)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:578ec8d7bebbf3dce5c4b8c6e7edefd29a6dc8e8ae7123fb8e30261fa497b83b

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)For the year ended December 31, 20X4, Entity X, which is a bank, presents the following comparative income statement.

-   ![](https://asc.understandingaccounting.org/asc-img/GUID-76A1E295-AE67-4382-8C00-4C9E4D855958-low.gif)
    
    "Entity X Consolidated Income Statement For the Years Ended December 31, 20X4, 20X3, and 20X2" 20X4 20X3 20X2 Interest income Loans " $2,795,052 " " $2,142,873 " " $2,072,997 " Investment securities " 628,887 " " 442,550 " " 465,842 " Other "209,629" "116,461" "79,193" Total interest income "3,633,568" "2,701,884" "2,618,032" Interest expense Deposits " 302,797 " " 30,280 " " 151,399 " Borrowed funds "279,505" "83,852" "167,703" Total interest expense "582,302" "114,132" "319,102" Net interest income "3,051,266" "2,587,752" "2,298,930" Provision for (recapture of) credit losses " 116,461 " " (186,337)" " 372,674 " Net interest income after provision for (recapture of) credit losses " 2,934,805 " " 2,774,089 " " 1,926,256 " Noninterest income Service charges on deposit accounts "201,702" "171,062" "151,969" Other service charges and fees "282,383" "239,487" "212,757" Total noninterest income "484,085" "410,549" "364,726" Noninterest expense Salaries and employee benefits "1,464,608" "1,176,183" "1,365,443" Occupancy and depreciation "376,587" "279,875" "349,679" Data processing "166,111" "146,308" "161,046" Advertising and marketing "56,876" "30,555" "28,192" Professional fees "73,230" "61,459" "74,473" Other "30,513" "21,399" "24,804" Total noninterest expense "2,167,925" "1,715,779" "2,003,637" Income before income taxes " 1,250,965 " " 1,468,859 " " 287,345 " Income tax expense "262,703" "308,460" "60,342" Net income " $988,262 " " $1,160,399 " " $227,003 "

##### [220-40-55-22](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-22)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:05caa4c4a6b69e7d7e007f9bbb2692be9532d6f753fea691781eccc49af5efb3

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)Entity X provides a disclosure that disaggregates the occupancy and depreciation expense and other expense captions into the categories listed in paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6). Those expense captions were identified as relevant expense captions because those captions contain one or more of the expense categories listed in paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6). In this Example, even though Entity X also presents separate expense captions on the face of its consolidated income statement for interest expense, provision for (recapture of) credit losses, data processing, advertising and marketing, professional fees, and income tax expense, those expense captions do not contain any of the expense categories listed in paragraph [220-40-50-6](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-6) (including those described in paragraphs

[220-40-50-10 through 50-11](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-10)

); therefore, those expense captions do not need to be further disaggregated. Entity X applies the practical expedient for employee compensation described in paragraph [220-40-50-20](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-20) and elects to not repeat the amount presented on the face of the income statement in the notes to financial statements.

##### [220-40-55-23](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-23)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:7f5f3c57e2ad76ee61b6362b3fc715ce6db15f4ca1d993fac7f3dce60bae222d

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)Entity X recognizes operating lease cost entirely within occupancy and depreciation expense and, therefore, includes operating lease cost as a separate category in accordance with paragraph [220-40-50-22(p)](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-22).

##### [220-40-55-24](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-24)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:68e5dcb077b9980703a6896ea1182ebcb6d98c4c27fdb6be2b244c31aef806a9

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)Entity X provides the following disclosure.

-   ![](https://asc.understandingaccounting.org/asc-img/GUID-BDA8B9A8-54FB-490D-8474-B5F2D8177A5E-low.gif)
    
    Disaggregation of Relevant Expense Captions Occupancy and depreciation expense Occupancy and depreciation expense 20X4 20X3 20X2 Depreciation " $164,232 " " $146,403 " " $145,907 " Operating lease expense " 152,445 " " 103,239 " " 149,842 " Other occupancy expenses (a) "59,910" "30,233" "53,930" Total occupancy and depreciation expense " $376,587 " " $279,875 " " $349,679 " (a) "Other occupancy expenses consist primarily of repair and maintenance expense for the years ended December 31, 20X4, 20X3, and 20X2." Other Other Intangible asset amortization " $13,139 " " $10,980 " " $10,068 " Other (b) "17,374" "10,419" "14,736" Total other " $30,513 " " $21,399 " " $24,804 " (b) "Other consists primarily of regulatory licensing fees and charitable contributions for the years ended December 31, 20X4, 20X3, and 20X2."

##### [220-40-55-25](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-25)

Pending content: yes

Source downloaded (UTC): 2026-09-09T23:05:07.264Z to 2026-09-09T23:05:07.264Z

Record version: sha256:c6502600d06566031cec7832b3f0c175601b042ae438b665a15c652e52db4b5c

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:

[220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)In addition to the tabular format disclosure illustrated in paragraph [220-40-55-24](https://asc.understandingaccounting.org/asc/220/40/#220-40-55-24), Entity X also must disclose its selling expenses and how it defines selling expenses in accordance with paragraphs

[220-40-50-35 through 50-36](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-35)

.

-   _Selling Expenses_
    
-   During the years ended December 31, 20X4, 20X3, and 20X2, the entity defined selling expenses to be the same as its advertising and marketing expenses, which are presented on the face of its consolidated income statement. The entity’s advertising and marketing expenses include costs incurred for advertising, market research, and business development.

Source downloaded (UTC): 2026-09-09T23:05:10.773Z to 2026-09-09T23:05:10.773Z

Record version: sha256:703e23cf47154dd95e00da18ba3025c31a6a43bd00f836fc5a02bb423be33a06

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


## ASC 220-40-65: 65 Transition and Open Effective Date Information

[Read section](https://asc.understandingaccounting.org/asc/220/40/#65-transition-and-open-effective-date-information)

SEC content: no

#### Transition Related to Accounting Standards Updates No. 2024-03, <em class="ph i">Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses</em>, and No. 2025-01, <em class="ph i">Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date</em>

##### [220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)

Pending content: no

Source downloaded (UTC): 2026-09-09T23:05:10.773Z to 2026-09-09T23:05:10.773Z

Record version: sha256:ec45742e7723352055e57153cc67aba981757a5b0eb9b25f3d9f9709855b3e28

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


[Accounting Standards Update 2024-03](https://asc.understandingaccounting.org/updates/asu-2024-03/)

2028-06-13

2026-12-16

2027-12-16

2026-12-16

2027-12-16

2026-12-16

2027-12-16

2026-12-16

2027-12-16

2026-12-16

2027-12-16

2026-12-16

2027-12-16

2026-12-16

2027-12-16

The following represents the transition and effective date information related to Accounting Standards Updates No. 2024-03, _Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses_, and No. 2025-01, _Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date_:

**Effective date and early adoption**

1.  a
    
    The pending content that links to this paragraph shall be effective for [public business entities](https://asc.understandingaccounting.org/glossary/p/#public-business-entity "A public business entity is a business entity meeting any one of the criteria below. Neither a not-for-profit entity nor an employee benefit plan is a business entity. It is required by the U.S. Securities and Exchange Commission (SEC) to file or furnish financial statements, or does file or furnish financial statements (including voluntary filers), with the SEC (including other entities whose financial statements or financial information are required to be or are included in a filing). It is required by the Securities Exchange Act of 1934 (the Act), as amended, or rules or regulations promulgated under the Act, to file or furnish financial statements with a regulatory agency other than the SEC. It is required to file or furnish financial statements with a foreign or domestic regulatory agency in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer. It has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market. It has one or more securities that are not subject to contractual restrictions on transfer, and it is required by law, contract, or regulation to prepare U.S. GAAP financial statements (including notes) and make them publicly available on a periodic basis (for example, interim or annual periods). An entity must meet both of these conditions to meet this criterion. An entity may meet the definition of a public business entity solely because its financial statements or financial information is included in another entity's filing with the SEC. In that case, the entity is only a public business entity for purposes of financial statements that are filed or furnished with the SEC.") for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted.
    

**Transition method**

1.  b
    
    A public business entity shall apply the pending content that links to this paragraph prospectively to financial statements issued for reporting periods beginning after the effective date of the pending content that links to this paragraph. The disclosures required by the pending content that links to this paragraph do not need to be included in financial statements for reporting periods beginning before the effective date that are being presented for comparative purposes with financial statements issued for periods after the effective date.
    
2.  c
    
    A public business entity may elect to apply the pending content that links to this paragraph retrospectively to any or all prior periods presented in the financial statements. If applied to financial statements for periods beginning before the effective date, those disclosures shall be prepared and presented in accordance with this Subtopic.