A wave of new accounting rules is set to crash down on public companies starting in 2027 — and finance chiefs who aren’t already scrambling to prepare could be caught flat-footed, experts warn.
The biggest and broadest change, known as DISE — short for income-statement expense-disaggregation — will hit every single public company in America in about five months, forcing firms to reveal far more detail about where their money actually goes.
The rule kicks in for annual periods beginning after December 15, 2026, which means January 1, 2027, for companies that run on a calendar year. And accounting advisers say the clock is already ticking.
“The real risk isn’t complexity for any one client,” said Bob Michaels, a partner in CrossCountry Consulting’s accounting advisory practice. “It’s really that with this much in motion, it’s easy for a company to miss the one item that actually applies to them.”
What’s changing — and why it matters
Right now, companies can lump massive costs into vague buckets like “selling, general and administrative expenses” or “cost of goods sold.” Under the new rule, those totals will have to be broken apart — revealing line items such as employee pay, depreciation and amortization.
Christine Smith, a professor at Tulane University’s Freeman School of Business, likened it to slicing up a pie. “It’s like taking the big pizza and then cutting it into its component parts,” Smith said on July 28.
The bottom line for investors won’t move. “It is not going to change the numbers on the financial statements,” Smith said. “Revenue will remain revenue and, in the aggregate, expenses will generally be the same.”
But the new disclosures could hand outside investors a window into spending patterns that only company insiders currently see. “The FASB has said, in essence, that we need to give the external users some of those insights that internal management has access to,” Smith said.
The catch: some firms aren’t ready
The problem, Smith said, is that plenty of corporations simply don’t have this granular data sitting in a spreadsheet, especially multinational firms juggling different accounting systems across units and countries.
“Not every company is going to have that detail just by running a standard report that they have,” Smith said. “It is going to require some companies to make some changes to their systems and how they’re extracting that data.”
DISE isn’t the only headache on the horizon. A pile of other, narrower rule changes from the Financial Accounting Standards Board also takes effect for periods beginning after December 15, 2026 — covering everything from purchased loans and hedge accounting to derivatives, complex acquisitions, stock-based customer incentives, preferred-stock dividends and technical “codification” corrections.
“It seems like every single quarter the FASB is putting out a new ASU,” Michaels said, referring to Accounting Standards Updates. “It’s kind of just adding up to the overall total workload.”
Not every firm will feel every rule — a company with no derivatives contracts, for example, has little to worry about on the hedge-accounting front. Still, Michaels warned against assuming a rule doesn’t apply without checking.
“You have to look at each one, consider each one and determine whether or not it impacts you,” he said. “Then obviously, if it does, you have to go forward and implement the standard.”
Banks could see earnings swing
For the banking sector, one change could shift the timing of profits in a meaningful way. Currently, a bank that buys a troubled loan typically books an immediate expense for expected losses the day of purchase, dragging down net income right away.
Under the new rule, that hit disappears on day one. Instead, the expected loss becomes an allowance against the loan and gets spread out over its life.
“Before adoption, there would be a negative P&L effect,” Smith said. “On day one, after the adoption, there is no P&L effect.”
The loans aren’t actually any safer — only the accounting timeline changes. “It’s a timing difference,” Smith said. “It’s not that over the life of the loan more or less expenses will be recognized. It’s the when.”
That could make a bank’s freshly reported earnings and per-share profits look stronger right after a troubled-loan purchase than they would have under the old rules — a wrinkle investors comparing quarter-to-quarter results will need to watch closely.
The bottom line: don’t wait
None of this points to a single earnings catastrophe — DISE, the biggest rule of the bunch, is a disclosure requirement, not a profit hit. But companies treating the overhaul as minor paperwork risk a chaotic scramble to rebuild reports, comb through contracts and explain last-minute changes to auditors and shareholders.
“With this many standards that are going to be coming effective in 2027, you’ve got to have a sense of urgency to understand today what that impact will be,” Michaels said. “You might be caught short in the end once you truly understand what the company has to do to get ready for that adoption.”
For investors, the payoff may be a clearer picture of corporate spending. For companies, the message from accounting experts is blunt: get moving now, or risk a year-end scramble when the 2027 deadline arrives.
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