IASB amends definition of “material”
As part of its Better Communication project, the IASB published amendments to IAS 1 and IAS 8 on 31 October 2018, to amend and clarify the definition of “material”.
Keywords: Mazars, Thailand, IFRS, IASB, IAS 1, Material
14 December 2018
The amendments aim to:
- align the definition of “material” across the Conceptual Framework and IFRS standards, and make minor improvements to the definition;
- incorporate some of the provisions of IAS 1 into the definition of “material” in order to give them more prominence;
- clarify the explanation accompanying the definition of “material”.
The new definition states that “information is material if omitting, misstating or obscuring it could reasonably be expected to influence the decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity”.
The IASB expects that the amendments will help entities make better materiality judgements, without substantially changing existing requirements.
The amendments are mandatory from 1 January 2020 and shall be applied prospectively. Early application is permitted.