Can you have different thresholds for materiality?

The answer is…you should!

Materiality is about providing information to users of the financial statements that has the ability to influence their decisions. As the financial statements are prepared for a wide range of users, different line items, disclosures, notes or components of the financial statements could be relevant and their significance “elevated” through applying materiality. As a result, various materiality thresholds (to assess quantitative materiality) and criteria (to assess qualitative materiality) should be developed.

The Board has undertaken several desktop reviews over the last two years that  indicate that entities generally develop a single materiality threshold and apply this to all financial statements. Preparers should review the requirements of the Standards of GRAP and assess what accounting policies, line items or disclosures could be relevant to users both quantitatively and qualitatively.

For information about  assessing materiality, read the ASB’s Guideline on The Application of Materiality to Financial Statements.