IPSASB ED 93: Proposed Amendments to the Definition of Material

Posted 10 June 2025 Written by Acts Online
Category Financial and Accounting

Brought to you by SA Accounting Academy: The International Public Sector Accounting Standards Board (IPSASB) has issued Exposure Draft (ED) 93, which proposes amendments to align the definition of ‘material’ across several reporting standards and the Conceptual Framework.

In terms of the proposed amendments in ED 93: Definition of Material, the IPSASB seeks to refine the application of materiality in IPSAS 1, Presentation of Financial Statements, and IPSAS 3, Accounting Policies, Changes in Accounting Estimates and Errors. The primary objective is to ensure consistency between these individual standards and the Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities.

The draft proposes to clarify that an entity is required to consider the information needs of ‘primary users’ rather than other users of general purpose financial reports when applying the concept of materiality. To effect this change, the IPSASB proposes to insert the word ‘primary’ before ‘users’ in the concept of materiality as described in paragraph 3.32 of the Conceptual Framework.

Key aspects of the exposure draft include:

  • Alignment of materiality definitions to reduce ambiguity in financial reporting.
  • Focusing disclosure requirements on the specific needs of resource providers and service recipients (primary users).
  • Amendments to the descriptive language in paragraph 3.32 of the Conceptual Framework.

Click here to download the 16-page Exposure Draft or access the 4-page At a Glance summary.

What this means for you, your business, or your clients

  • For yourself: You must update your technical knowledge of the IPSAS framework to distinguish between general users and ‘primary users’ when making professional judgements regarding financial statement disclosures.
  • For your business: Public sector accounting and audit firms should review their materiality assessment methodologies and internal templates to ensure they align with the refined focus on primary user needs as proposed in ED 93.
  • For your clients: Public sector entities will need to re-evaluate their reporting processes to ensure that financial statements remain concise and relevant by excluding information that does not meet the materiality threshold for primary stakeholders.

Originally published at https://accountingacademy.co.za/news/read/ipsasb-ed-93-definition-of-material

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