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Hi sir, the materiality benchmarks are as shown below in the notes,
0.5% -1% of revenue
1% – 2% of total assets
5% – 10% of profit
Does a matter have to satisfy all these three criteria in order for it to be considered MATERIAL ?
Or it can satisfy any of the 3 criteria for it to be considered MATERIAL ?
Also, lets say if a matter is 20% of the total assets it’s not MATERIAL since it doesn’t fall within the range right ?
In the exam, if it satisfies any single criterion then generally it should be considered material.
In the exam, assume a matter is material if it exceeds 0.5% turnover, or 1% total assets or 5% profit.
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