New Interim Reporting Guidance: What ASU 2025-11 Means for Entities That Issue Interim Financial Statements

The Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-11, Interim Reporting (Topic 270): Narrow Scope Improvements, in December 2025. The update clarifies when interim reporting guidance applies, improves the organization and navigability of ASC 270, and introduces a disclosure principle intended to help entities identify material events that should be disclosed in interim periods.

Importantly, the FASB emphasized that ASU 2025-11 does not expand or reduce existing interim disclosure requirements but rather provides clarity around current requirements and how they should be applied.

Interim reporting guidance in ASC 270 is largely derived from APB Opinion No. 28, issued more than 50 years ago. Over time, the Topic has become difficult to navigate due to its historical structure and numerous amendments resulting from subsequent accounting standards and disclosure requirements.

Stakeholders, including preparers and auditors, expressed concern that ASC 270 was unclear regarding:

• When interim reporting guidance applies
• Which disclosures are required for interim periods
• How to evaluate events occurring between annual reporting dates

In addition, changes to SEC rules removed certain interim disclosure requirements, highlighting the need for a clear, GAAP-based disclosure principle for interim reporting. ASU 2025-11 addresses these concerns by reorganizing Topic 270 and clarifying its application.

Main Provisions of ASU 2025-11

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.

Practice Note: Entities in certain industries may not be required to provide certain statements to achieve a full presentation (such as cash flow statements for investment companies), in accordance with the relevant ASC industry Topics. In such circumstances, the entity is still considered to have provided a full set of financial statements for purposes of determining whether interim financial statements are within the scope of ASC 270.

New Interim Disclosure Principle

The update introduces a disclosure principle requiring entities to disclose events and changes that occur after the end of the most recent annual reporting period that have a material impact on the entity, even if those disclosures are not otherwise explicitly listed in ASC 270.

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

Clarified Form and Content of Interim Financial Statements

The update 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.

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 term “Condensed Statements” has been added to the ASC Master Glossary and is defined as follows:

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.

Practice Notes:

• A non-SEC registrant preparing condensed statements who applies SEC Regulation S-X Rule 10-01(1) or Regulation S-X Rule 8-03(a) is considered to be in compliance with the content requirements provided by ASC 270-10-45-22.
• ASU 2025-11 clarifies that the condensed format does not eliminate the requirement to disclose material developments; rather, it affects the presentation format, not the materiality threshold.

Consolidated List of Interim Disclosures

ASU 2025-11 adds a comprehensive list within ASC 270 that identifies all interim disclosures required by other Codification Topics. This list, together with the disclosure principle described above, represents the complete population of interim disclosures required under GAAP.

Effective Date and Transition

The effective dates vary by entity type:

• Public business entities: Interim reporting periods within fiscal years beginning after December 15, 2027
• All other entities: Interim reporting periods within fiscal years beginning after December 15, 2028

Early adoption is permitted for all entities.

Entities may apply the guidance prospectively or retrospectively to any or all prior interim periods presented.

Next Steps for ASU 2025-11

Although ASU 2025-11 does not change the underlying interim disclosure requirements, entities should evaluate how the clarified scope, consolidated disclosure list, and new disclosure principle affect current interim reporting practices. Early consideration can help ensure consistent application and avoid unintended disclosure gaps in future interim filings.

Our audit and assurance professionals can help assess the impact of ASU 2025-11 on your interim reporting processes and support implementation planning.