In accounting, materiality is a pervasive concept that relates to the qualitative characteristics, especially relevance and reliability. Materiality and relevance are both defined in terms of what influences or makes a difference to a decision maker, but the two terms can be distinguished. A decision not to disclose certain information may be made, say, because investors have no need for that kind of information (it is not relevant) or because the amounts involved are too small to make a difference.
Magnitude by itself, without regard to the nature of the item and the circumstances in which the judgment has to be made, will not generally be a sufficient basis for a materiality judgment. The Board's present position is that no general standards of materiality can be formulated to take into account all the considerations that enter into an experienced human judgment.
Quantitative materiality criteria may be given by the Board in specific standards in the future, as in the past, as appropriate.
My Hometown CPAs - Blog
Read advice submitted by local firms and find CPAs and accountants by metro area and US region.
A Taxing Matter Blog
Anthony G Adams
Kay Bell Texas
Grumpy Old Accountants
RIP Jasper (family friend)
Yee IP Lawyer