DISE: for calendar-year filers, the clock starts January 1
Calendar-year public companies have about 90 days before their first reporting year under the new expense disaggregation rules begins.
ASU 2024-03, Disaggregation of Income Statement Expenses (DISE), as clarified by ASU 2025-01, takes effect for annual periods beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. The first annual disclosure will not appear until the FY2027 10-K, which makes it easy to file under next year's problem.
It isn't. The data has to be captured correctly starting January 1.
What the standard asks for
For each relevant expense caption on the face of the income statement, companies will disclose in a tabular footnote the amounts of:
Purchases of inventory
Employee compensation
Depreciation
Intangible asset amortization
Depreciation, depletion and amortization recognized as part of oil- and gas-producing activities, where applicable
Amounts that are not separately disaggregated get a qualitative description. Companies also disclose total selling expenses and, in annual periods, their own definition of selling expenses.
Why the general ledger is the hard part
Most general ledgers were not built this way. Compensation sits inside cost of revenue, R&D and SG&A. Depreciation gets allocated through overhead and into inventory, and then flows out through cost of sales. The numbers exist, just not in the shape the footnote needs.
Three decisions to make this quarter
Mapping. How the chart of accounts and allocation logic map to the new categories, including how capitalized costs are tracked when they leave inventory.
Selling expenses. How the company will define selling expenses, and whether that definition holds up consistently across segments and periods.
Ownership. Who owns the reconciliation from the GL to the footnote once interim reporting begins in 2028, and how it will be reviewed as a control.
The takeaway
The companies that will have an easy 2027 are making these decisions now, while there is still time to change how data is captured, rather than reconstructing a year of activity after the fact.
Solaris helps public-company reporting teams scope and implement new standards. To talk through a DISE readiness plan, book a 20-minute call.