Sometime last year, I was in a meeting with a Senior accountant where we were discussing about correcting certain prior period errors and to him his argument was as simple as 'Israel we can overlook these errors, they are immaterial', well, indeed they were immaterial, but from my end I understood why he wanted it uncorrected (to conceal 'certain anomalies').

I understood his point on materiality because materiality is very important to an accountant, it is even an auditor's favourite theme song. It makes sense as I will rather bother myself about important stuffs and material stuffs are important stuffs! However, some accountants in order to achieve 'particular representation' tend to leave an immaterial error uncorrected based on the argument that the IFRS is applied to only material items (see IAS 8, Accounting policies, changes in accounting estimates and errors, paragraph .

Well, if you are one of those accountants, I am going to burst your bubbles! I disagreed with him from the technical standpoint as paragraph 8 of IAS 8 also explains that it is inappropriate to make, or leave uncorrected, immaterial departures from IFRSs to achieve a particular presentation. Paragraph 41 of IAS 8 further buttresses this point by making it clear that financial statements do not comply with IFRSs if they contain either material errors or immaterial errors made intentionally to achieve a particular presentation of an entity's financial position, financial performance or cash flows. Paragraph 41 even made a stronger statement.

So IFRSs do not apply solely to material items and not only material errors are of importance.

Thanks for reading....

Usidamen Israel