Beyond the Line Item: Inside the Natural Expense Categories of DISE
If Episode 1 covered the "why" behind DISE, Episode 2 is where theory meets practice. Embark's Nicole Harger and Adam Olsen get into the technical details of all five required natural expense categories, working through the tricky classification questions companies are already bringing to their teams. This is the episode to bookmark when your client asks, "But where exactly does that go?"
In this episode:
- The difference between natural and functional expense classification, and why it matters for your disclosure
- Purchases of inventory: what's included, what's excluded, and how intercompany transactions and inbound freight factor in
- Cost-incurred vs. expense-incurred basis: what each means and why most companies will elect cost-incurred
- Employee compensation: the ASC 718 definition of "employee," how to handle contractors and leased workers, and a practical approach to mixed workforces
- Depreciation and intangible asset amortization: how to handle finance lease ROU assets, internal-use software, and the costs that look like amortization but aren't
- DD&A for extractive industries, plus special considerations for asset-related costs, liability-related expenses, and reimbursement arrangements
- How to define selling expenses for your business, and why that definition has to hold up over time