A Vision for the Future of Corporate Reporting (Part 3): Decision Making and Materiality
The UK’s Financial Reporting Council (FRC) has published a thought-leadership piece, A Matter of Principles: The Future of Corporate Reporting.[1] Does it portray the future of corporate reporting as you see it? Comments are due by February 5, 2021.
I have been trying to stir up the community to talk about materiality, primarily related to XBRL/Inline XBRL, but also related to other non-financial areas, such as Sustainability.
The executive summary for the FRC paper summarizes the discussion on materiality in this way:
“Materiality is essentially a filter for determining what information is included in a particular report. The general principle for materiality that we propose in the model is that materiality will be judged by reference to the communication objective of the specific report. We do not believe that a single definition of materiality is appropriate for all reports.”