Materiality: Another step in the disclosure campaign

The publication of the IASB’s draft practice statement on materiality reveals the detail of a significant part of the standard-setter’s plan to try to make financial information more useful and easier to read. The plan involves refining the literature on materiality while encouraging a cultural shift away from compliance and towards communication. The draft practice statement sits halfway between the two objectives, as a non-mandatory guidance document which is intended to make preparers, auditors and enforcers think about materiality.