Which of the following statements about AASB 1031 Materiality is/are correct?
I.$\quad$Qualitative factors may be the primary reason that an item is classified as material.
II.$\quad$Materiality means that accounting standards only have to be applied to an item if the amount of the item is greater than or equal to 10 per cent of the relevant base amount.
III.$\quad$An accounting standard's provisions may have to be applied to an item even when that item is less than 1 per cent of the relevant base amount.
IV.$\quad$Materiality applies to accounting measurement and policies but not to disclosure.
A)III only
B)I and II only
C)I and III only
D)I, III and IV only

Question

Quizplus · Accepted Answer

I. This statement is correct. Qualitative factors can have a significant impact on whether an item is classified as material or not.

II. This statement is incorrect. AASB 1031 Materiality does not specify any specific percentage or amount for determining materiality. Instead, it advises entities to use professional judgement.

III. This statement is correct. Materiality is not just limited to quantitative factors, and even small items may be material based on their qualitative impact.

IV. This statement is incorrect. Materiality applies to both accounting measurement and disclosure, as both can have an impact on the financial statements' users' decision-making processes.

Which of the Following Statements About AASB 1031 Materiality Is/are \quad

Which of the Following Statements About AASB 1031 Materiality Is/are $\quad$