Key takeaways
The Financial Accounting Standards Board’s Disaggregation of Income Statement Expenses (DISE) disclosure requirements, introduced in Accounting Standards Update (ASU) 2024-03, may initially appear straightforward. In practice, however, compliance can be complex. Companies that prepare early by addressing data structures, internal controls and reporting processes can create a smoother path to compliance, provide the intended transparency for investors and unlock meaningful operational benefits.
What is your DISE readiness level?
Organizations typically fall into one of four DISE readiness profiles:
Level 1: Compliance blind spot
Leaders view DISE primarily as a disclosure issue. They have not performed formal assessments, mapped expense categories, evaluated system capabilities or considered DISE’s impact on internal control over financial reporting (ICFR).
Level 2: Technical awareness
Finance leadership understands the accounting requirements and has begun reviewing ASU 2024-03. They still treat DISE as a technical accounting exercise, with limited focus on systems, controls, estimation methodologies or investor messaging.
Level 3: Operational readiness emerging
Initial mapping of relevant expense captions and natural categories is complete. Leaders have identified system gaps and estimation requirements. Teams have completed dry runs or disclosure mock-ups and begun cross-functional conversations.
Level 4: Audit-ready and strategically positioned
Leaders have embedded DISE into systems, controls and reporting processes. Expense data is repeatable and auditable. Leadership uses DISE-level insight to enhance forecasting, cost transparency and investor communications.
If your organization is not clearly at Level 3 or 4, DISE will likely require more time, coordination and effort than anticipated.
DISE readiness and strategic value checklist
The following elements provide a diagnostic for leaders seeking more than baseline compliance:
1. Strategic readiness
Leaders should understand what DISE enables beyond compliance. Key questions include the following:
- Have you evaluated how DISE-level data could enhance forecasting, cost visibility and margin analytics?
- Are you treating DISE as a data asset rather than a disclosure obligation?
- Have you mapped how granular expense data could support investor messaging and earnings call narratives?
- Does executive leadership understand how DISE can improve transparency and strategic credibility?
2. Technical accounting and policy assessment
Leaders should confirm that their judgments are clear, defensible and audit-ready. Important questions to ask include the following:
- Have you identified all relevant expense captions and assessed whether the presentation obscures material categories?
- Have you chosen between the cost-incurred and expense-incurred approaches for inventory categories under Accounting Standards Codification Topic 330 and documented your rationale?
- Have you identified all natural expense categories embedded within functional line items?
- Have you defined how the “other” category will be constructed and justified?
3. Data and systems readiness
Leaders should assess whether their systems can produce DISE outputs without relying on manual work-arounds. Vital questions to ask include the following:
- Do you have the data granularity required to populate the DISE disclosure accurately and consistently?
- Does your chart of accounts, subledger structure and cost-center design support natural expense categorization?
- Do your enterprise resource planning (ERP) and reporting tools support a repeatable, auditable DISE process?
- Have you identified where estimation methodologies will be required?
4. Controls, governance and ICFR readiness
Leaders should evaluate whether DISE-related risks are designed within the control environment. Crucial questions to ask include the following:
- Have you identified new ICFR touchpoints related to mapping, estimation, reconciliations and tabular disclosures?
- Do process owners understand the risks related to data lineage, system changes, spreadsheets and allocation logic?
- Have you assessed whether DISE triggers new walk-throughs or key controls?
5. Cross-functional alignment and program governance
Leaders need to assess whether DISE is owned across the organization. Key questions include the following:
- Have you identified owners across finance, IT, operations, financial planning and analysis, and internal audit?
- Is there a governance structure to manage system changes, estimation logic and disclosure review?
- Have you completed at least one DISE dry run with management and auditors?
6. Implementation planning and change management
Leaders should align their implementation plans to the timeline. Important questions to ask include the following:
- Is there a documented DISE roadmap aligned with 2027 annual reporting and 2028 interim reporting?
- Have you aligned DISE requirements with ERP upgrades or data transformation initiatives?
- Have you developed training for the finance, operations and reporting teams?
Turning DISE into a strategic advantage
Public companies can move beyond compliance and use DISE to strengthen cost visibility, decision making and investor confidence. DISE can serve as a catalyst for modernizing financial infrastructure and improving strategic thinking.