ED/2017/6 Definition of Material – Proposed amendments to IAS 1 and IAS 8

The International Accounting Standards Board (IASB) has published an Exposure Draft to clarify the meaning of ‘material’.

ED/2017/6 proposes minor amendments to refine the definition of ‘material’ contained in IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Estimates and Errors in which the term ‘material’ to:

• Align the wording of the definition in IFRS standards and the definition in the Conceptual Framework for Financial Reporting
• Incorporate some of the existing requirements in IAS 1 into the definition to give them additional prominence; and
• Improve the clarity of the explanation accompanying the definition.

It is further noted that the IASB has recently issued Practice Statement 2 Making Materiality Judgements (see IFRS News item here) and plans to issue soon a revised Conceptual Framework in which slightly different wording is used for the term ‘material’.  To avoid confusion about the definition of ‘material’, the Board also proposes consequential amendments will also be made to the definitions used in these other two publications following any changes made to IAS 1 and IAS 8 as a result of ED/2017/6.

Comments on ED/2017/6 are requested by 15 January 2018.

Further information, including access to the Exposure Draft are available from the IASB’s web site here.