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Accounting
Materiality
The idea that only information that could influence a user's decision needs to be included in financial statements.
Materiality keeps financial statements from being cluttered with tiny unimportant details. It is a core principle in both IFRS and GAAP.
It's the 'does this actually matter to someone reading the report?' filter.
Real world: A £500 error in a £10 billion company is not material. A £500 error in a small start-up could be very material. Accountants use judgement to decide what to disclose.
💡 Materiality keeps accounting focused on what actually matters to decision-makers.