Objective (AASBPS2_12-17_COMPmay19_01-20)

This AASB Practice Statement 2 Making Materiality Judgements (Practice Statement) provides reporting entities with non‑mandatory guidance on making materiality judgements when preparing general purpose financial statements in accordance with Australian Accounting Standards.

AusCF paragraphs and footnotes included in this Practice Statement apply only to:

(a)        not-for-profit entities; and

(b)        for-profit entities that are not applying the Conceptual Framework for Financial Reporting.

Such entities are referred to as ‘AusCF entities’.  For AusCF entities, the term ‘reporting entity’ is defined in AASB 1057 Application of Australian Accounting Standards and Statement of Accounting Concepts SAC 1 Definition of the Reporting Entity also applies.  For-profit entities applying the Conceptual Framework for Financial Reporting (as set out in paragraph Aus1.1 of the Conceptual Framework) shall not apply AusCF paragraphs or footnotes.

The guidance may also help other parties involved in financial reporting to understand how an entity makes materiality judgements when preparing such financial statements.