Implementing ASU 2024-03 is not just a compliance task but a complex, multiyear transition.
A detailed readiness assessment and phased implementation are key to develop a disclosure model.
Early planning strengthens cost transparency, internal controls and investor confidence.
Implementing ASU 2024-03, Disaggregation of Income Statement Expenses (DISE), is not a single-point compliance exercise. It is a multiyear journey that requires coordinated action across finance, systems, controls and operations.
While ASU 2024-03 introduces new disclosure requirements, the underlying challenge is operational. Many public companies do not currently capture expense data at the level of granularity required, nor do they have repeatable processes, controls or ownership models in place to support consistent disclosure. As a result, the level of effort required is frequently underestimated.
Companies that wait too long risk compressed timelines, manual workarounds and increased audit scrutiny. Those that plan early can turn DISE into a controlled, auditable and strategically useful financial reporting capability.
ASU 2024-03 scope and timing
ASU 2024-03 requires public business entities to disclose DISE in a standardized tabular format within the footnotes in annual and interim financial statements.
The disclosure applies to income statement line items that qualify as relevant expense captions, meaning captions that include one or more of the required expense categories:
Multicolor icon
Purchases of inventory
Employee compensation
Multicolor icon
Depreciation
Intangible asset amortization
Depletion and amortization for oil and gas mining entities
Effective dates
Annual reporting for fiscal years beginning after Dec. 15, 2026
Interim reporting for periods beginning after Dec. 15, 2027
Importantly, DISE readiness is not solely a finance responsibility. Successful adoption requires coordination across finance, information technology, operations, financial planning and analysis, and internal audit to ensure data integrity, control design and audit readiness.
Are you prepared for ASU 2024-03?
Many organizations are surprised to learn how much effort DISE requires once systems, estimation methodologies and controls are considered.
A structured readiness assessment can help identify:
- Where required data already exists
- Where estimation or allocation methodologies will be necessary
- Where systems, controls or governance gaps may introduce risk
This early clarity is critical to avoid last-minute remediation and audit challenges.
A phased approach to DISE readiness
The timeline below reflects how leading organizations are approaching ASU 2024-03 adoption in a structured, defensible way.
Target timing: Early 2026
- Build a clear understanding of ASU 2024-03 requirements and scope.
- Educate finance, IT and operations teams on DISE implications.
- Begin cross-functional discussions on impact, ownership and priorities.
Intended outcome: A shared understanding of what DISE requires and why early action matters
Target timing: Mid-2026
- Review income statement captions and existing expense mappings.
- Identify relevant expense captions subject to DISE.
- Assess current systems, data availability, controls and estimation processes.
Intended outcome: A clear view of existing capabilities and initial exposure areas
Target timing: Late 2026
- Compare current capabilities to DISE requirements.
- Define the implementation approach, including cost-incurred vs. expense-incurred decisions.
- Establish a cross-functional project team, governance structure and detailed roadmap.
Intended outcome: An actionable plan aligned to both reporting deadlines and broader transformation initiatives
Target timing: Late 2026 through mid-2027
- Update the chart of accounts, reporting hierarchies and data structures.
- Implement system changes and estimation methodologies.
- Perform dry runs and validate internal controls over financial reporting and disclosure controls.
Intended outcome: Audit-ready processes supported by repeatable systems and documented controls
Target timing: 2027 and beyond
- Begin annual DISE disclosures for fiscal year 2027.
- Begin interim disclosures in early 2028.
- Maintain controls, refine processes, update policies and train teams.
Intended outcome: A sustainable DISE operating model embedded into normal reporting cycles
The takeaway: Why early planning matters
DISE requires more than new disclosures. It requires new discipline around how expense data is captured, governed and explained.
Organizations that plan early benefit from:
- Reduced reliance on manual workarounds
- Fewer audit surprises
- Stronger internal cost visibility
- More credible and confident investor communications
Those that delay their journey often face compressed timelines, elevated risk and missed opportunities to modernize finance operations.
RSM supports public companies throughout the DISE journey, from early readiness through sustained compliance. Our approach spans:
- Technical accounting and policy development
- Systems, data and reporting design
- Controls, governance and ICFR (internal control over financial reporting) integration
- Process redesign and change enablement
We help organizations deliver accurate, audit-ready DISE disclosures while building a foundation that improves forecasting, cost transparency and investor confidence.
Contact our professionals
