Disaggregation-related projects

Date recorded:

Cover paper (Agenda Paper 21)

Both the IASB and the FASB are currently undertaking or will undertake projects whose objectives include providing users of financial statements with more disaggregated information. The purpose of this meeting was to provide both boards with an opportunity to share comments and ask questions about these projects. The boards were not asked to make any decisions.

FASB: Statement of Cash Flows (FASB Research Project) (Agenda Paper 21A)

In June 2021, the FASB staff published Invitation to Comment, Agenda Consultation (2021 ITC) to solicit broad stakeholder feedback about the future standard-setting agenda of the FASB. Chapter 1 Disaggregation of Financial Reporting Information requested stakeholder feedback on improving the relevance of the statement of cash flows.

Investors and other users generally agreed that greater disaggregation of the statement of cash flows should be a priority for the FASB to help them better perform their analyses. At its June meeting, the FASB Chair added a project to the FASB research agenda to explore targeted improvements to the statement of cash flows to provide additional decision-useful information for investors and other allocators of capital.

The staff plans to conduct research and outreach in a variety of areas to better understand the relative priority for different potential improvements (such as working capital reconciliations and other direct method supplementary information) as well as the costs and feasibility of implementing certain improvements.


The IASB Chair reported that during the World Standard-setters Conference it became clear that participants held diverse views as to the scope of the project on statement of cash flows which has only recently been added to the IASB’s research project pipeline. There was a question as to why the boards are not conducting the project as a joint project, however one IASB member said that it is beneficial that the boards are at different stages of the project so they can learn from each other’s discussions.

The question as to whether to mandate the direct or indirect method for preparing the cash flow statement will be polarising. An IASB member said that the stakeholders’ preference depends on the jurisdiction. One option was to retain the indirect method and complement this by disclosure of some items that would have been presented if using the direct method such as cash paid to suppliers or cash paid for labour.

It was also noted that the population of what might be seen as cash has changed and an IASB member asked whether the FASB will look at that as part of this project. The FASB Chair replied that there is a separate project on crypto currencies but that project will also consider the impact on the cash flow statement.

IASB: Primary Financial Statements—Project Overview (Agenda Paper 21B)

In March 2021, the IASB began redeliberating the proposals in response to feedback received on the Exposure Draft ED/2019/7 General Presentation and Disclosures.​ The IASB has made key decisions in relation to key topics of subtotals and management performance measures (MPMs) and is progressing its work on disaggregation.​ The agenda paper detailed the following main areas in the ED updated to reflect the IASB’s tentative decisions to July 2022:

  • Subtotals
  • MPMs
  • Disaggregation
  • Disclosure of operating expenses by nature
  • Unusual income and expenses


IASB members highlighted that digital reporting was an important part of the project and asked FASB members whether that was similarly true for the FASB project on income statements. The FASB confirmed this but said that they have difficulties tagging segment disclosures, for example, as there is diversity in measurement due to the management approach. The IASB Chair said that in general the traditional ‘paper first – digital second’ approach may have to be reconsidered.

There was a short discussion on unusual items and how challenging the topic was for the IASB. IASB members noted that continuing with this topic would have consumed too many resources and it was uncertain whether a solution as to how to distinguish unusual items from usual items could actually be achieved. A FASB member noted that this information should be in management commentary rather than the primary financial statements.

FASB: Disaggregation—Income Statement Expenses (DISE)—Project Background and Next Steps (Agenda Paper 21C)

This paper provided an overview of the background and history of the FASB’s Disaggregation—Income Statement Expenses project (formerly named the Financial Performance Reporting—Disaggregation of Performance Information or “FPR” project) and provided an update on recent feedback received and next steps in the project.

There was no significant discussion on that topic.

FASB: Targeted Improvements to Income Tax Disclosures—Overview (Agenda Paper 21D)

The FASB project on Targeted Improvements to Income Tax Disclosures aims to improve the transparency and decision usefulness of income tax disclosures. The focus of the project is primarily on information about income taxes paid and the rate reconciliation table.


One IASB member asked whether the proposed break down of income tax paid by geography would also reconcile to the income by jurisdiction. FASB members responded that it would be too challenging to require disaggregation of the income by jurisdiction as some revenue is incurred across multiple jurisdictions.

FASB: Segment Reporting (SEGRPT)—Standard Setting–Segment Reporting–Overview and Decisions Reached to Date (Agenda Paper 21E)

Topic 280 Segment Reporting and IFRS 8 Operating Segments are substantially converged standards. The FASB’s project is focused on making certain improvements to the disclosure requirements in Topic 280. The FASB completed its initial deliberations in July 2022.

The purpose of this session was to provide IASB members with an update on the project and key amendments in the forthcoming proposed Update.


An IASB member noted the use of the word “significant” in relation to disclosure about segment expenses and wondered whether the term would be defined by the FASB given the recent discussions about this term in the ISSB’s exposure drafts. FASB members responded that it would not be defined but if the Chief Operating Decision Maker sees a report about the expenses on a regular basis, they are deemed significant.

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