Every set of financial statements tells a story. Preparers of financial statements are continuously making decisions about what information to share with their users to ensure that the financial reporting is clear, useful and focused. To meet this objective, preparers need to make appropriate judgements and decisions about materiality – this is not easy.
In providing guidance to preparers on applying materiality, the IPSASB issued a proposed Practice Statement on Making Materiality Judgements. The ASB issued the proposed guidance locally as ED 220. The guidance will be non-mandatory – meaning that its application is not required to state compliance with IPSAS Accounting Standards.
The IPSASB used IFRS® Practice Statement 2: Making Materiality Judgements issued by the IASB, as the basis for developing the proposed guidance. The IPSASB adapted the examples to reflect the public sector context and proposed additional examples to better reflect the application of materiality by the public sector. For example, new examples are included to illustrate materiality judgements on the measurement principles in the IPSAS Accounting Standards, and on the classification and presentation of financial statement elements based on qualitative characteristics.
The ASB invites you to share your comment on ED 220, either by attending a scheduled engagement (contact amandab@asb.co.za for information) or by submitting your comment to info@asb.co.za. The comment period closes on 14 August 2026.