ExpertEasy2 marksShort Answer
The Qualitative Characteristics of Financial InformationSyllabus BQualitative CharacteristicsMateriality
ACCA · Question 20 · The Qualitative Characteristics of Financial Information
Section A
Under the Conceptual Framework, what is the term used to describe the threshold above which missing or misstating information could influence the decisions of primary users of financial statements?
Section A
Under the Conceptual Framework, what is the term used to describe the threshold above which missing or misstating information could influence the decisions of primary users of financial statements?
How to approach this question
Identify the concept that deals with the significance or size of an item in the context of financial reporting.
Full Answer
Materiality is an entity-specific aspect of relevance. Information is material if omitting, misstating, or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those reports.
Common mistakes
Confusing it with 'Relevance' (which is the broader qualitative characteristic).
Practice the full ACCA FA — Financial Accounting Practice Exam 6
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