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FASB proposes changes to materiality references

  • FASB (US Financial Accounting Standards Board) (lt blue) Image

Sep 28, 2015

On September 28, 2015, the Financial Accounting Standards Board (FASB) issued a proposed Accounting Standards Update (ASU) "Assessing Whether Disclosures Are Material" as part of its disclosure framework project.

The U.S. Accounting Standards Codification uses the term "material" but does not contain a definition or guidance on applying the term. The proposed ASU would insert a statement that "materiality" is a legal concept. It would also add a statement that omitting “disclosures about immaterial information is not an accounting error.”

The discussion of materiality in the IASB and FASB conceptual frameworks was aligned in 2010 as part of a joint effort by the two boards. The IASB and the FASB have now both taken unilateral steps to amend the converged definition of materiality in their frameworks.

Review Deloitte's related Heads Up newsletter, as well as the press release and FASB in Focus newsletter on the FASB’s website.

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