IFRS Practice Statement 2: Making Materiality Judgements (Practice Statement) provides companies with guidance on how to make materiality judgements when preparing their general purpose financial statements in accordance with IFRS Standards.
The need for materiality judgements is pervasive in the preparation of financial statements. IFRS Standards require companies to make materiality judgements in decisions about recognition, measurement, presentation and disclosure.
The Practice Statement:
The Practice Statement is a non-mandatory document. It does not change or introduce any requirements in IFRS Standards and companies are not required to comply with it to state compliance with IFRS Standards.
Companies are permitted to apply the guidance in the Practice Statement to financial statements prepared any time after 14 September 2017.
IFRS Practice Statement 2 Making Materiality Judgements was issued in September 2017 for application from 14 September 2017. The text of the Basis for Conclusions is contained in Part C of this edition.
Other Standards have made minor consequential amendments to IFRS Practice Statement 2 Making Materiality Judgements, including Amendments to References to the Conceptual Framework in IFRS Standards (issued March 2018) and Definition of Material (Amendments to IAS 1 and IAS 8) issued October 2018.