The primary purpose of the Balance Sheet is to reflect a. the market value of the firm s assets at some point in time. The Statements of Financial Accounting Concepts identify the two primary qualities that make accounting information useful for decision making as a. neutral and verifiable. Materiality is one of the pervasive concepts discussed in SFAC No. 2 . Materiality judgments generally may be based solely on the magnitude of the item. The nature and magnitude of an item as well as the circumstances in which the judgment has to be made are integral aspects of a materiality judgment.
Relevant items are always material.
Materiality judgments generally may be made without consideration of the magnitude of the item involved. The claims to an asset s benefits are legally enforceable. An asset is tangible. An asset is obtained at a cost. An asset provides future benefits.