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On 28 October 2015, the International Accounting Standards Board (IASB) published draft guidance to help company management determine whether information is material. The guidance is part of the IASB’s wider initiative to improve disclosures.

The draft guidance, in the form of a draft Practice Statement, has been developed in response to concerns that management are often uncertain about how to apply the concept of materiality and therefore use the disclosure requirements in the Standards as a checklist.

This can result in excessive disclosure of immaterial information that can obscure useful information and also make financial statements cluttered and less understandable. It can also lead to useful information being left out.

The Exposure Draft was open for comment until 26 February 2016.