Document ID: chunk:federal_register_of_legislation:F2024L00708:body:0:p30
Version: federal_register_of_legislation:F2024L00708
Segment Type: other
Provision Reference: 
Character Range: 80903–84084

notes.

Australian defined terms

In respect of public sector entities, local governments, governments and most, if not all, government departments are reporting entities:
government             The Australian Government, the Government of the Australian Capital Territory, New South Wales, the Northern Territory, Queensland, South Australia, Tasmania, Victoria or Western Australia.
government department  A government controlled entity, created pursuant to administrative arrangements or otherwise designated as a government department by the government which controls it.
local government       An entity comprising all entities controlled by a governing body elected or appointed pursuant to a Local Government Act or similar legislation.

Appendix B
Application guidance
This appendix is an integral part of the Standard. It describes the application of paragraphs 1–132 and has the same authority as the other parts of the Standard.

General requirements for financial statements

Materiality
B1 Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.
B2 Materiality depends on the nature or magnitude of information, or both. An entity assesses whether information, either individually or in combination with other information, is material in the context of its financial statements taken as a whole.
B3 Information is obscured if it is communicated in a way that would have a similar effect for primary users of financial statements to omitting or misstating that information. The following are examples of circumstances that may result in material information being obscured:
(a) material information about an item, transaction or other event is disclosed in the financial statements but the language used is vague or unclear;
(b) material information about an item, transaction or other event is scattered throughout the financial statements;
(c) dissimilar items, transactions or other events are inappropriately aggregated;
(d) similar items, transactions or other events are inappropriately disaggregated; and
(e) the understandability of the financial statements is reduced as a result of material information being hidden by immaterial information to the extent that a primary user is unable to determine what information is material.
B4 Assessing whether information could reasonably be expected to influence decisions made by the primary users of a specific reporting entity's general purpose financial statements requires an entity to consider the characteristics of those users while also considering the entity's own circumstances.
B5 Many existing and potential investors, lenders and other creditors cannot require reporting entities to provide information directly to them and must rely on general purpose financial statements for much of the financial information they need. Consequently, they are the primary users to whom general purpose financial statements are directed. Financial statements are prepared