CIMA BA3 · Chapter 2 · Question 5 of 8
Under the IASB Conceptual Framework, when is information considered material?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) When omitting, misstating or obscuring it could reasonably be expected to influence the decisions of the primary users of the financial statements
Explanation
Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions made by the primary users. Materiality depends on the nature and size of the item in the context of the entity. The IFRS Standards set no fixed percentage or monetary limit; a percentage such as 5% is only a practical rule of thumb.
More Accounting concepts and qualitative characteristics MCQs
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- Q2Which of the following is NOT an enhancing qualitative characteristic in the IASB Conceptual Framework?
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