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IPSASB: Definition of Material
- 04 December 2025
- Accounting
- South African Accounting Academy
Summary:
The International Public Sector Accounting Standards Board has issued the final pronouncement on the Definition of Material (Amendments to IPSAS 1, IPSAS 3, and the Conceptual Framework).
Article:
This pronouncement conforms the definition of the term material between the Conceptual Framework and within IPSASB’s authoritative guidance and lays the foundation for planned guidance on materiality judgments in financial reporting.
It clarifies that general-purpose financial reports are prepared to meet the information needs of primary users for accountability and decision-making purposes.
This final pronouncement contains a table setting out the amendments to IPSAS Standards, including the summary of changes.
The effective date of the amendments to IPSAS Standards is 1 January 2027, with the Conceptual Framework becoming effective upon publication of this pronouncement.
Refer to our previous Alert dated 6 June 2025 regarding the Exposure Draft of this document
Access the 4-page At a glance document at https://ifacweb.blob.core.windows.net/publicfiles/2025-10/IPSASB-AAG-Definition-Material_0.pdf
Click here to download the 17-page document:
https://ifacweb.blob.core.windows.net/publicfiles/2025-10/IPSASB-Definition-Material.pdf
Relevance to Auditors, Independent Reviewers & Accountants:
- It is important to stay informed on publications issued by the regulators and standard-setters, e.g. IFAC & IPSASB.
- This pronouncement clarifies that decisions about materiality are intended to reflect the needs of the primary users of general purpose financial reports.
- It also aligns materiality guidance across IPSAS Standards with the Conceptual Framework for General Purpose financial reporting by Public Sector entities.
Relevance to Your clients:
- It is important to stay informed on publications issued by the regulators and standard-setters, e.g. IFAC & IPSASB.
- This pronouncement clarifies that decisions about materiality are intended to reflect the needs of the primary users of general purpose financial reports.
- It also aligns materiality guidance across IPSAS Standards with the Conceptual Framework for General Purpose financial reporting by Public Sector entities.