• Register
Return to: Home > News > Regulation > More guidance on application of materiality needed: ESMA

More guidance on application of materiality needed: ESMA

The main issue found on materiality in financial reporting is in the application, according to the majority of respondents to a European Securities and Markets Authority (ESMA) consultation.

The consultation, which was launched in November 2011, found that while the majority of all respondents believe the concept of materiality is generally well understood, they see diversity in application thus more guidance is needed.

However, the majority think the guidance should come from the International Accounting Standards Board.

The main reason for diversity in application was attributed to management judgement, separate perspectives of different stakeholder groups, and general difficulties in applying the concept to certain issues.

Many respondents also said the application of materiality concept to disclosures could help address the problem of ‘too many disclosures obscuring the reporting about an entity’s financial position and performance’.

There were also calls for the principles to be applied in assessing materiality in interim and annual financial reports to be the same.

ESMA is due to hold a public roundtable in Paris later this year to discuss the various issues raised in response to the consultation paper.

Top Content

    ARGA team, assemble!

    The new top team has been named that will see in root-and-branch reform at the Financial Reporting Council (FRC) as it transforms into the Audit, Reporting and Governance Authority (ARGA). Will the new duo be as dynamic as some are hoping? Robin Amlôt reports.

    read more

    FASB: a quest for simpler standards

    FASB chair Russell Golden addressed the IMA 2019 Annual Conference and Expo at the Sheraton San Diego Hotel and Marina, California, on 18 June. IMA immediate former chair-emeritus Alex Eng acted as moderator. Joe Pickard reports.

    read more

    The future of audit, and how to get there

    Two recent reports peer into the future of the audit profession. One analyses what an audit should offer, while the other looks at how the audit process will be carried out. Robin Amlôt takes a closer look at both.

    read more

    EFAA elects new president, focuses on digital future

    EFAA’s new president, Salvador Marin, outlined his key priorities for the next two years at the organisation’s 2019 annual general meeting, while outgoing president Bodo Richardt offered advice. Robin Amlôt reports.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.