AICPA FinREC Releases Draft Single-Segment Disclosures

Chris Johnson
| 1/23/2025
AICPA FinREC releases draft single-segment disclosures

As broker-dealers prepare for ASU 2023-07, the AICPA FinREC circulates draft disclosures for single-segment entities.  

On Jan. 21, 2025, the American Institute of Certified Public Accountants (AICPA) Financial Reporting Executive Committee (FinREC) provided for public comment draft segment disclosures for a broker-dealer with a single reportable segment. Securities and Exchange Commission (SEC)-registered broker-dealers are within the scope of Accounting Standards Codification (ASC) 280 and must comply with Financial Accounting Standards Board Accounting Standards Update (ASU) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which is effective for public entities for fiscal years beginning after Dec. 15, 2023, and interim periods within fiscal years beginning after Dec. 15, 2024. Nonissuer SEC-registered broker-dealers are considered public entities because they are required to file audited financial statements with the SEC.

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ASU 2023-07 does not change legacy segment disclosures or how an entity determines its operating or reportable segments, but it does require new segment disclosures including these:

  • Single-segment entities must provide in annual periods all segment disclosures required in ASC 280, including those newly required by ASU 2023-07.
  • Entities must disclose the name and title of the chief operating decision-maker (CODM) and how the CODM uses the reported segment measure of profit and loss.
  • Significant segment expenses regularly provided to the CODM must be disclosed.
  • Entities must report an amount for other segment items with a qualitative description.

FinREC’s draft disclosures as well as additional segment guidance will ultimately be included in the AICPA’s “Brokers and Dealers in Securities – Accounting Guide.” Registered broker-dealers might consider FinREC’s draft disclosure when preparing their own segment disclosures and provide comments to FinREC. Comments are due March 24, 2025.

Portions of AICPA materials reprinted with permission. Copyright 2025 by AICPA.

FASB materials reprinted with permission. Copyright 2025 by Financial Accounting Foundation, Norwalk, Connecticut. Copyright 1974-1980 by American Institute of Certified Public Accountants.

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Chris Johnson
Chris Johnson
Managing Partner, Capital Markets