Alert: Release of IFRS Practice Statement 2 Making Materiality Judgements

Category: IFRS

Alert: Release of IFRS Practice Statement 2 Making Materiality Judgements

The International Accounting Standards Board (IASB) issued a new Practice Statement to help financial statement preparers assess whether information is material to an entity’s general purpose financial statements. The Practice Statement summarizes the materiality requirements in International Financial Reporting Standards (IFRS) and adds practical guidance and examples. This non-mandatory guidance does not change any IFRS requirements, nor introduce any new IFRS requirements.

The Practice Statement:

  • Presents an overview of the general characteristics of materiality;
  • Introduces a four-step process that may be applied in making materiality judgements when preparing an entity’s financial statements;
  • Provides specific guidance on how to make materiality judgements regarding comparative information, errors and covenants, and in the context of interim reporting.

Entities are permitted, but not required, to apply the guidance in the Practice Statement to financial statements prepared any time after September 14, 2017. The Practice Statement, and additional resources, can be accessed by clicking here.


This communication contains a general overview of the topic and is current as of October 11, 2017. The application of the principles addressed will depend upon the particular facts and circumstances of each individual case. Accordingly, this publication is not a substitute for professional advice and we recommend that any decisions you take about the application or not of any of the information presented be made in consultation with a qualified professional who can address any variance that may be required to reflect your circumstances. Please contact your local MNP representative for customized assistance with the application of this material. MNP LLP accepts no responsibility or liability for any loss related to any person's use of or reliance upon this material. © MNP LLP 2017. All rights reserved.

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Michelle Balmer

Michelle Balmer CPA, CA

Vice President, Assurance

Michelle Balmer, CPA, CA, is a Senior Assurance Services Partner with MNP. With 14 years of experience in public practice, Michelle helps a broad range of public and privately held companies in a variety of industries. She also works on special projects, including costing studies, benchmarking and best-practice studies, operational analyses, litigation support and due diligence.

As a key member of MNP's Assurance team, Michelle has played an instrumental role in assurance policy development, implementing accounting and assurance standards firm-wide and educating assurance practitioners regarding methodologies and new pronouncements. She also provides technical advice and consultation on accounting and assurance issues, as well as on rules of professional conduct issues, to all MNP practitioners.

Michelle was certified a Chartered Accountant (CA) after obtaining a Bachelor of Commerce degree from the University of Alberta. She has been actively involved with the Institute of Chartered Accountants of Alberta, including the Chartered Accountants School of Business, in an instructional and marketing capacity. An avid volunteer, she has assisted numerous groups such as the Easter Seals of Alberta, Paralympic Sports Association and Junior Achievement of Northern Alberta.