Preparing for DISE: What finance leaders need to know
DISE reporting requirement timelines are approaching quickly. Here’s what finance leaders should know about ASU 2024-03 and why preparing for new expense disaggregation disclosures should start now.
Key takeaways
- DISE will require greater visibility into income statement expenses, increasing pressure on data quality, governance, and reporting discipline.
- Organizations that evaluate data, allocation methodologies, and controls now can reduce implementation risk and avoid compressed timelines later.
- DISE readiness is an opportunity to strengthen reporting consistency, data governance, and finance operations beyond compliance.
The FASB’s Disaggregation of Income Statement Expenses (DISE) requirements, issued under ASU 2024-03, introduce expanded disclosure requirements for all public business entities. These disclosures are designed to increase investor visibility into how expenses are structured within the income statement. While DISE doesn’t change how companies recognize or measure expenses, it does require more detailed disaggregation of key expense categories in the financial statement footnotes.
The first required annual disclosures apply to fiscal years beginning after December 15, 2026, with interim reporting requirements applying to fiscal years beginning after December 15, 2027. Organizations should begin the time-intensive process of assessing data, systems, and controls as soon as possible. Doing so can identify gaps in how expense information is captured, structured, and governed before implementation timelines become compressed.
Organizations should not underestimate the effort involved in DISE implementations. Management is often surprised to learn they may not have the information needed to comply with DISE. The earlier they assess their data, systems, processes, and controls, the more time they’ll have to identify and address gaps before reporting deadlines arrive.
Barbara ArdManaging Partner, Accounting Advisory
Highspring
What DISE requires and why it matters
DISE increases visibility into the composition of expenses reported within the income statement through expanded footnote disclosures. Public business entities will be required to disaggregate certain expense categories—including employee compensation, depreciation, amortization, and inventory-related costs—within commonly presented financial statement captions.
The operational impact is significant. Companies must be able to consistently identify, support, and reproduce the underlying expense data behind these disclosures.
Expense transparency is increasing
Investor expectations around financial reporting continue to evolve, particularly where aggregated expense captions limit insight into cost structure and performance drivers. DISE addresses this by standardizing more detailed disclosure of natural expense categories.
What this means for finance teams
The focus shifts to whether underlying systems and processes can consistently produce traceable, audit-ready expense detail. This creates pressure across data integrity, consistency, and cross-functional alignment.
Who is impacted and how will DISE be applied
DISE applies to all public business entities that file or furnish financial statements with the SEC. While private companies are not directly in scope, they may still be affected through IPOs, acquisitions, or capital market scenarios.
Scope and applicability
The standard applies to SEC registrants and requires disaggregation of relevant expense captions in both annual financial statements for fiscal years beginning after December 15, 2026, and interim financial statements for fiscal years beginning after December 15, 2027. Early adoption is permitted and may require some organizations to accelerate their readiness efforts.
What’s included and excluded
DISE focuses on natural expense categories within captions such as cost of goods sold, cost of services, and SG&A. Items such as interest expense and income taxes are excluded from disaggregation requirements.
What finance leaders need to evaluate now
Before designing solutions, finance leaders need clarity on whether current reporting environments can support DISE-level disclosure requirements without additional complexity or manual effort.
Assess data readiness and granularity
Evaluate whether expense data is captured with sufficient detail and consistency, including:
- Consistent classification across systems and entities
- Traceability from source data through reporting outputs
- Limited reliance on spreadsheets or manual adjustments
Evaluate reporting structures and system alignment
Many ERP and chart of accounts structures were not built for this level of disaggregation. Determine whether:
- The chart of accounts supports required expense categories
- Reporting hierarchies are aligned across systems and entities
- Fragmentation introduces reconciliation risk or manual workarounds
Review allocation methodologies and governance
DISE may expose inconsistencies in how expenses are allocated across business units or functions. Ensure methodologies are consistent, well-documented, supported by underlying data, and subject to appropriate internal controls.
How to prepare for DISE
Readiness requires coordinated changes across data, processes, and controls—not just isolated reporting updates.
Map data sources and identify system gaps
Identify where required expense data originates and surface gaps in:
- Data availability across systems
- Integration between ERP, subledger, and reporting tools
- Manual intervention points in reporting workflows
Strengthen reporting processes, classifications, and controls
Controls are critical to accuracy and audit readiness. Evaluate whether they properly address:
- Data completeness and validation
- Expense classification accuracy and consistency across business units and disparate systems
- Allocation review and approval
- Disclosure preparation, controls, and sign-off
Align ownership across finance, IT, and internal controls
DISE requires coordination across multiple functions. Early alignment ensures clear ownership of data inputs, reporting definitions, and governance before timelines compress.
Turn compliance readiness into a transformation opportunity
Organizations that prepare now will be better positioned to reduce implementation risk and avoid last-minute reporting challenges. Rather than treating DISE as a disclosure exercise, organizations can use it as an opportunity to standardize expense definitions, reduce manual reporting effort, and improve consistency across reporting cycles.
In many cases, DISE also becomes a catalyst to modernize systems, strengthen data architecture, and improve the quality of financial information used for decision-making. Finance leaders that act early can move beyond reactive compliance and reduce implementation risk. With the right approach, DISE can help build stronger data foundations, improved governance, and a more agile finance function.
One integrated partner for compliance and transformation
Highspring is here to help organizations assess DISE readiness, identify gaps in financial data and reporting processes, and build practical roadmaps that connect compliance requirements to broader transformation opportunities.
This approach helps finance teams move beyond compliance efforts and establish a more scalable, consistent reporting foundation. Contact us today to get started.
