Saturday 25 February 2017
The objective of this project is to help preparers, auditors and regulators to use judgement when applying the concept of materiality.
How the concept of materiality is applied in practice is seen by many as a major cause of the ‘disclosure problem’. Not making appropriate materiality judgements can result in both the disclosure of too much irrelevant (ie immaterial) information and not enough relevant (ie material) information.
As part of its Disclosure Initiative the Board carried out research on what is meant by the term ‘materiality’. We looked at local accounting guidance, case law, regulatory and auditing guidance to help us understand how others have used or defined the concept of materiality. We spoke to preparers, investors, auditors, regulators and national standard-setters.
In October 2015 the Board published an Exposure Draft: IFRS Practice Statement Application of Materiality to Financial Statements to obtain feedback from parties with an interest in financial reporting.
In December 2016, the Board completed its redeliberations of the comments received on the Exposure Draft and asked the staff to start balloting the final Practice Statement.
The Board’s work plan includes a separate project on the definition of materiality.
The Materiality Practice Statement project was discussed at the December 2016 IASB meeting
The Materiality project was discussed at the November 2016 IASB meeting
The Materiality project was discussed at the October 2016 IASB meeting
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