IPSASB Issues ED 97 on Making Materiality Judgments

Posted 20 May 2026 Written by Acts Online
Category Financial and Accounting

Brought to you by SA Accounting Academy: The International Public Sector Accounting Standards Board (IPSASB) has released Exposure Draft (ED) 97, which proposes a new IPSAS Practice Statement on making materiality judgments in public sector financial reporting.

In terms of the proposed framework, the IPSASB aims to develop and provide reporting entities with non-mandatory guidance on making materiality judgments when preparing financial statements in accordance with International Public Sector Accounting Standards (IPSAS) Accounting Standards. This proposed Practice Statement is aligned with the International Financial Reporting Standards (IFRS) Practice Statement 2 Making Materiality Judgements, adapted to the public sector context.

The need for materiality judgments is pervasive in the preparation of financial statements, affecting decisions regarding recognition, measurement, presentation, and disclosure. Requirements in IPSAS Standards only need to be applied if their effect is material to the complete set of financial statements. Whether information is material is a matter of judgment and depends on the specific facts and circumstances of each public sector entity.

The draft IPSAS Practice Statement illustrates the types of factors that entities should consider when judging materiality and includes practical examples based on limited facts. Unlike authoritative IPSAS Accounting Standards, IPSAS Practice Statements do not establish mandatory requirements or provide guidance on the level of assurance required for the financial information.

Click here to download the 5-page At a Glance summary.

Click here to download the 42-page Exposure Draft (ED) 97.

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

  • For yourself: As an accountant or auditor working in or with the public sector, you must review the proposed guidance in ED 97 to understand how materiality judgments should be structured and justified under IPSAS.
  • For your business: Public sector advisory firms and audit practices should assess how these proposed guidelines will affect their audit methodologies and advisory frameworks for public entity financial statements.
  • For your clients: Public sector entities and state-owned enterprises preparing financial statements under IPSAS will need to align their internal accounting policies and disclosure decisions with this materiality framework once finalized.

Originally published at https://accountingacademy.co.za/news/read/ipsasb-ipsas-practice-statement-making-materiality-judgments

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