The directors of the company are undecided as to whether they should amend the financial statements to provide for additional doubtful debts of $150 000 as at 30 June 20X7.In accordance with the quantitative guidelines in AASB 1031 Materiality,the additional doubtful debts of $150 000 would be material as it represents:

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AASB 1031 Materiality defines materiality as information that could influence the economic decisions of users of the financial statements. The threshold for materiality varies depending on the size and nature of the item in question. In this case, the additional doubtful debts of $150 000 represents 20% of total receivables, which is a significant percentage and could impact the economic decisions of users of the financial statements. Therefore, the directors should consider amending the financial statements to provide for this.

The Directors of the Company Are Undecided as to Whether