ACCA Applied Knowledge · Financial Accounting · Key principles and concepts of accounting
Information is said to be material if:
Information is material if omitting or misstating it could reasonably be expected to influence users' decisions. Materiality is an entity-specific aspect of relevance, and IFRS does not prescribe a fixed percentage threshold.
- Aomitting or misstating it could reasonably be expected to influence users' decisionsCorrect
- Bit exceeds a fixed percentage of revenue set by IFRS Standards
- Cit has been audited by an external auditor
- Dit relates only to transactions above the entity's average transaction size
Explanation
Materiality is an entity-specific aspect of relevance. Information is material if omitting, misstating or obscuring it could reasonably influence primary users' decisions. IFRS does not set a fixed percentage threshold, so the second option is wrong.
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