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:
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.