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Technical Alert - FASB ASU 2025-11

 

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow Scope Improvements. The ASU is intended to 

  • clarify when interim information is subject to ASC 270, 

  • improve the organization of interim disclosure requirements of the guidance in ASC 270, and

  • clarify when ASC 270 applies to which entities. 

 

Guidance

 

Under the ASU, an entity is subject to ASC 270 if it provides “interim financial statements and notes in accordance with GAAP.” The ASU also 

  • addresses the form and content of such financial statements, 

  • adds lists to ASC 270 of the interim disclosures required by all other Codification topics, and 

  • establishes a principle under which an entity must “disclose events since the end of the last annual reporting period that have a material impact on the entity.” 

The FASB emphasized that the amendments are not intended to “change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements.” Rather they give clarity on how current requirements should be applied.

 

Scope

 

ASU 2025-11 clarifies that ASC 270 applies to all entities that provide interim financial statements and accompanying notes in accordance with GAAP, not only SEC registrants.

To be within scope, interim financial statements generally must include a full set of financial statements, such as:

  • Statement of financial position

  • Statement of earnings and comprehensive income

  • Statement of cash flows

  • Statement of changes in equity

 

The guidance does not apply to limited interim information, such as selected financial data, individual statements, or ratio-only disclosures.

 

Disclosure Principle

 

The ASU introduces a disclosure principle requiring entities to disclose events and changes that 

  • occur after the end of the most recent annual reporting period and

  • have a material impact on the entity, 

 

The latter applies even if those disclosures are not otherwise explicitly listed in ASC 270.

 

This disclosure principle is intended to promote consistency and improve decision-useful information for financial statement users without expanding existing disclosure requirements.

​

Presentation

 

The ASU clarifies how interim financial statements may be presented, including guidance for 

  • SEC registrants, who continue to follow applicable SEC rules (e.g., Regulation S-X), and 

  • non-SEC registrants, who are provided new Codification guidance on the form and content of interim financial statements when condensed statements are presented.

ASC 270-10-45-21 provides non-SEC registrants with explicit options for the form and content of interim financial statements presented in accordance with U.S. GAAP. This guidance resolves longstanding ambiguity by 

  • outlining two acceptable presentation approaches and 

  • specifying how interim disclosures apply under each option.

Option 1. Full Set of Interim Financial Statements

Under ASC 270-10-45-21(a), a non-SEC registrant may present a full set of interim financial statements, including all statements and notes required for annual reporting.

When this option is selected:

  • The entity applies interim reporting guidance across all applicable Codification topics.

  • Disclosure requirements closely resemble annual period GAAP disclosures, updated for interim activity.

  • The disclosure principle in ASC 270 requires disclosure of events and changes since the most recent annual period that have a material impact.

Note: This option effectively results in an annual-style GAAP presentation and disclosure, prepared for an interim reporting period.

Option 2. Condensed Statements

Alternatively, under ASC 270-10-45-21(b), a non-SEC registrant may present condensed statements if the previous annual financial statements have been 

  • issued or 

  • made available for issuance.

The ASU defines the term “Condensed Statements” as:

Financial statements that are presented at a level that is more aggregated than the annual financial statements or have limited notes subject to the disclosure requirements in Topic 270 or both. (U.S. Securities and Exchange Commission [SEC] registrants are required to consider the guidance in paragraph 270-10- S45-2. See Regulation S-X Rule 10-01 [17 CFR 210.10-01] and Regulation S-X Rule 8-03 [17 CFR 210.8-03]).

Under this option:

  • The condensed interim financial statements will result in higher levels of aggregation as compared to annual financial statements. Presentation is based on the requirements and defined criteria found in ASC 270-10-45-22. Not-for-profit entities must follow the requirements in ASC 270-10-45-25.

  • Disclosures are limited to those required specifically for interim periods under ASC 270 and other applicable Codification topics. Disclosures that would substantially duplicate information included in the most recent annual financial statements — such as accounting policy footnotes — may generally be omitted.

  • Disclosures of contingencies and other uncertainties that may affect the fairness of presentation should be repeated, even if disclosed in the annual financial statements.

  • The entity must still apply the interim disclosure principle, requiring disclosure of material events or changes occurring since the previous annual reporting period, even if those disclosures are not otherwise explicitly listed.

Consolidated List of Interim Disclosures

The amendments add a comprehensive list within ASC 270 that identifies all interim disclosures required by other Codification Topics. This convenient list, together with the disclosure principle described above, represents the complete population of interim disclosures required under GAAP.

Effective Dates

The amendments in ASU 2025-11 are effective as follows:

  • Public business entities — For interim reporting periods within annual reporting periods beginning after December 15, 2027.

  • Entities other than public business entities — For interim reporting periods within annual reporting periods beginning after December 15, 2028.

  • Early adoption is permitted for all entities.

(ASC 270-10-65-1)

Transition

Entities may apply the ASU’s amendments either (1) prospectively or (2) retrospectively to any or all prior periods presented in the financial statements. (ASC 270-10-65-1)

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