The objective of financial statements is to provide information to a range of users for the purpose of eco-nomic decision making. To be useful, such statements must present fairly the financial position, perform-ance and cash flows of the reporting entity. Where information which is required by the relevant financial reporting framework is omitted or misstated and such information could influence the economic decision-making of a user, financial statements cannot be said to achieve a fair presentation. The concept of ‘mate-riality’ is used to describe such information.
A recurring theme of discussions at the European Enforcers Coordination Sessions (a forum in which all European National Enforcers of financial information meet to exchange views and discuss experiences of enforcement of IFRS) is the apparent differing views regarding the practical application of the concept of materiality amongst preparers, auditors, possibly users of the financial reports and, in some instances, accounting enforcers. The purpose of this consultation paper is to seek comments from interested parties on their understanding of various aspects of materiality in an effort to contribute to a consistent applica-tion of this important concept in financial reporting.
In order to allow all interested stakeholders to respond to this consultation, the deadline has been extended to 30 March 2012. Responses should be submitted online in the section Consultations
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ESMA Extends The Deadline For The Consultation On The Considerations Of Materiality In Financial Reporting
Date 13/02/2012