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Hey Mike,
I have been reading a few questions on materiality and i am so confused on what to consider as material for PBT normally 5% to 10% is not material in some of the questions have have studied. However, a question i just completed claimed that a materiality of 5.6% was material.
Could you please enlighten me on what % you would consider material in terms of total assets, PBT and total revenue.
Thank you so much
Kind Regards
AnikeFor quantitative measurement, traditional benchmarks are:
½ – 1% of turnover
5 – 10% of profit before tax
1 – 2% of gross assetsI find it difficult to believe that something that lies between 5% and 10% is considered immaterial in some answers that you have read – I would love you to give me the exam reference where such items have been treated as immaterial so that I can read it for myself!
OK?
For qualitative matters, the monetary value of the item under consideration is irrelevant
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