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What is the threshold of materiality for assets, profit and revenue?
Secondly if the company has insured its property , in case of any damages could company record provision .There is no definitive answer to “What is the threshold of materiality ….”
Materiality levels are set at the planning stage of an audit and are entirely dependent upon the planner’s assessment of the risk of material misstatement and detection risk (therefore audit risk)
Many audit firms apply percentages of various bases to arrive at a monetary value but that’s really just a quick and consistent approach in order to get guidance
“If a company has insured its property, in case of any damages could company record provision?”
A “Provision”, by statutory definition, is a credit. Now, why would a company wish to create a credit balance on a provision account because one of its insured assets has been damaged?
The creation of the provision will require the provision account to be balanced off and that would be by way of debiting an expense to profit or loss.
Why would you want to reduce your year’s profits because one of your INSURED assets has been damaged?
I genuinely cannot see where your mind is going for you to have asked this question?
I’m sorry!
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