• IFRS Bulletin 2018-08
Publikation:

IFRS Bulletin 2018-08

01. Februar 2019

AMENDMENTS TO IAS 1 AND IAS 8 – DEFINITION OF MATERIAL

Summary

In October 2018, the IASB issued amendments to IAS 1 Financial Statement Presentation and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to clarify the definition of ‘material’ in the context of applying IFRS. As the concept of what is and is not material is crucial in preparing financial statements in accordance with IFRS, a change in the definition may fundamentally affect how preparers make judgments in preparing financial statements.

Materiality decisions are common in determining the level of precision in applying accounting policies in practice (e.g. capitalisation thresholds for property and equipment), determining what disclosures are most meaningful to users and the level of aggregation of information throughout financial statements (e.g. portfolios of financial assets subject to expected credit losses).

These amendments are a component of the IASB’s ‘Disclosure Initiative’ project, which is intended to simplify financial statements and increase their usability.

A summary of the amendments are as follows:

 

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