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Monday 24 February 2020

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Exposure Draft

Exposure Draft October 2015

IFRS Practice Statement Application of Materiality to Financial Statements: Exposure Draft and Comment Letters (ED/2015/8)

On 28 October 2015, the International Accounting Standards Board (IASB) published draft guidance to help company management determine whether information is material. The guidance is part of the IASB’s wider initiative to improve disclosures.

The concept of materiality acts as a filter through which management sifts information to ensure that financial statements include all the financial information that could influence users’ investment decisions. It also enables management to present material information in a clear and effective way, excluding information that is not material.

The draft guidance, in the form of a draft Practice Statement, has been developed in response to concerns that management are often uncertain about how to apply the concept of materiality and therefore use the disclosure requirements in the Standards as a checklist. This can result in excessive disclosure of immaterial information that can obscure useful information and also make financial statements cluttered and less understandable. It can also lead to useful information being left out.  

Whether information is material or not depends on a range of factors and entity-specific circumstances, and is a matter of judgement. Determining what information is material also requires an understanding of the users of the financial statements and the decisions that they make based on those financial statements.

Comment letters


The IASB sought comments on this draft Practice Statement by 26 February 2016.

Please note: when submitting a comment letter or when communicating with the IFRS Foundation, the IASB or any of its constituent bodies, you acknowledge and accept the IFRS Foundation Privacy Policy, which details how we use and process your data.

View the Comment Letters.



Due process documents
Exposure Draft IFRS Practice Statement Application of Materiality to Financial Statements [PDF]
Proyecto de Norma Documento de Práctica de las NIIF: Aplicación de la Materialidad o Importancia Relativa a los Estados Financieros [PDF] (Spanish)
Recepción de comentarios hasta el 26 de febrero de 2016
公開草案: IFRS実務記述書:財務諸表への重要性の適用 [PDF] (Japanese)