Materiality judgment demands that companies assess whether information could reasonably influence investor decisions.

In 2017 and 2018, the IASB's refined the definition of materiality and furnish guidance along with case studies to facilitate informed judgments. In 2022, the IFRS Foundation issued a call for research as it was seeking to partner with national standard-setters to gather research and information related to the changes and additions to the IASB’s literature on making materiality judgments.

The findings of the research underscored a robust understanding of materiality's concept. While utilization of the 2017 and 2018 guidance exhibited disparities across regions, where implemented, it proved beneficial. Moreover, the research advocates for sustained efforts to raise awareness among stakeholders regarding the available guidance. Looking ahead, the IASB remains committed to providing further assistance to companies navigating materiality judgments, with insights from its research poised to influence ongoing discussions, including those within projects such as the initiative regarding climate-related and other uncertainties in the financial statements.

The national standard-setters taking part in the research initiative, working in partnership with academics from their jurisdictions, are from Australia, Botswana, China, Malaysia, Mexico and New Zealand.

Access the research summary on IFRS Foundation’s website.