CA ANZ and CPA have lodged a joint submission on IPSASB ED 93 Definition of Material, Stage 1 of a three-part project to improve the requirements and guidance about the materiality concept in its public sector standards. This project is similar to, and based on, work done by the IASB for the private sector in 2018 in response to stakeholder feedback.

The IASB changes improved the wording of the definition of material, particularly making it clear that that providing too much information that risks obscuring is as much a materiality factor as too little information. The changes also provided greater clarity about which users needed to be considered when making materiality judgements.

Accordingly, the proposals in IPSASB ED 93 will incorporate these changes into the public sector conceptual framework and standards, with some additional public sector modifications. Stage 2 of its materiality project will produce more guidance (like the IASB’s IFRS Practice Statement 2: Making Materiality Judgements), and Stage 3 will deal with materiality as it applies to sustainability information.

Our ED 93 submission supports the proposed changes, which we believe should improve the application of materiality in the public sector in the same way the corresponding IASB amendments were helpful in the private sector. However, we have made minor suggestions to clarify wording about the intent of the reforms.