Disclosure Initiative—Definition of Material (Amendments to IAS 1 and IAS 8)

Current Status Next Steps

The IASB is drafting final amendements.

The IASB expects to issue final amendments in Q4 2019.

BACKGROUND

The Accounting Standards Board (AcSB) is participating in the International Accounting Standards Board’s (IASB) project to amend IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

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The objective of this project is to clarify and align the definition of “material” and provide guidance to help improve consistency in the application of that concept whenever it is used in IFRS® Standards.

The AcSB’s due process includes ensuring that Canadian entities’ financial reporting needs are considered by the IASB and issuing the AcSB’s own exposure draft on each IASB proposal. Subject to the responses to the AcSB’s exposure draft on whether the IASB’s proposals are appropriate for application in Canada, the AcSB expects that the amendments will be incorporated into Canadian GAAP in accordance with the AcSB’s strategy of adopting IFRS® Standards for publicly accountable enterprises.

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PROJECT NEWS & DECISION SUMMARIES

AcSB response – Exposure Draft – Definition of Material
On January 11, 2018, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft issued in September 2017. The letter agrees with some parts of the proposals but expresses concern with including terms such as “obscuring”, “omitting” and “misstating” in the definition of material. The AcSB suggests removing these terms from the proposed definition because the AcSB thinks that such subjective terms may make the definition difficult to operationalize or apply and may lead to increased litigation risk. Furthermore, the AcSB encourages the IASB to work with the International Auditing and Assurance Board to ensure that the IFRS definition of material aligns with the assurance definition. Read the AcSB letter posted by the IASB.

AcSB Decision Summary – December 14, 2017
The Board discussed and approved its response letter to the IASB® Exposure Draft, “Definition of Material (Proposed amendments to IAS 1 and IAS 8),” subject to drafting changes.

AcSB Exposure Draft – Definition of Material (Proposed amendments to IAS 1 and IAS 8)
October 3, 2017. The AcSB has issued its Exposure Draft that corresponds to the IASB’s Exposure Draft on this topic. Stakeholders are encouraged to submit their comments by January 15, 2018.

IASB® Exposure Draft – Definition of Material (Proposed amendments to IAS 1 and IAS 8)
September 19, 2017.  The IASB has issued an Exposure Draft proposing amendments to IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. Canadian stakeholders are encouraged to submit their comments to the IASB by January 15, 2018.

 

Disclaimer: This project summary has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on this project, which may change after further Board deliberations. Decisions to publish Handbook material are final only after a formal ballot process.