ICAEW AF · Chapter 1 · Question 6 of 11
According to the IFRS Conceptual Framework, when is information material?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) When omitting, misstating or obscuring it could reasonably be expected to influence the decisions that primary users make on the basis of the financial statements
Explanation
Materiality is an entity-specific aspect of relevance, based on the nature or size (or both) of the items the information relates to. The test is whether omitting, misstating or obscuring the information could reasonably be expected to influence the decisions of primary users. Percentage rules of thumb may help in practice but are not the definition.
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