The International Public Sector Accounting Standards Board (IPSASB) has published Exposure Draft (ED) 97, IPSAS Practice Statement, Making Materiality Judgments.
Materiality is presented as a core filter in financial reporting, helping to determine which information is relevant for accountability purposes and decision‑making.
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Information is treated as material when its omission, misstatement or obscured presentation can influence decisions or affect accountability assessments.
The IPSASB acknowledged that applying this concept in practice has often been difficult.
Some entities have reportedly tended to follow IPSAS disclosure requirements as a “checklist rather than applying professional judgment”, it said in a statement.
The board conformed its definition of materiality last year and is now proposing further guidance to support its practical use.
ED 97 introduces non‑authoritative guidance intended to assist preparers in applying materiality when producing financial statements under IPSAS Accounting Standards.
The draft Practice Statement outlines a four-step process to help entities identify, evaluate, structure and reassess information that may be material.
According to the IPSASB, the draft does not alter existing IPSAS requirements.
Instead, it is designed to promote a more consistent and better‑informed application of materiality across the standards.
The global body is seeking comments on the draft from stakeholders by 28 August 2026.
IPSASB chair Thomas Müller-Marqués Berger said: “Materiality helps entities determine what information to include in or exclude from financial statements, and our proposed guidance in ED 97 provides a systematic approach to making such judgments.
“We want to hear from our stakeholders if this guidance can help them make judgments more confidently and consistently in practice, and where additional clarity may be needed.”
The proposed guidance has been tailored for the public sector from IFRS Practice Statement 2: Making Materiality Judgements.
The IPSASB is inviting input from preparers, auditors and other interested parties to ensure the final Practice Statement reflects how materiality is being applied in real-world public sector financial reporting.
Last month, the IPSASB opened a public consultation on how public sector entities should present information in their general purpose financial statements.
