The Corporate Reporting Dialogue (CRD), a group of eight major standards organisations, has released a statement clarifying the common principles of materiality, as part of moves to encourage greater coherence, consistency and comparability between corporate reporting frameworks, standards and related requirements globally
The publication includes a comparison of the materiality definitions and approaches used by the CRD participants.
Huguette Labelle, CRD chair, said: ‘It is not possible to establish a “one size fits all” quantified definition of materiality – in many countries it is a legal concept with established definitions.
‘However, this paper demonstrates a commitment by participants to identify practical ways and means by which their respective frameworks, standards and related requirements can be aligned and rationalised.’
Participants in the CRD are CDP; Climate Disclosure Standards Board; US Financial Accounting Standards Board (FASB); the Global Reporting Initiative; International Accounting Standards Board (IASB); International Integrated Reporting Council (IIRC); International Organization for Standardization; and Sustainability Accounting Standards Board.
As FASB is currently working on its own project ' Disclosure Framework: exposure drafts on materiality' the US standards setter was unable to participate fully in the CDP’s project and has said it cannot commit to the CDP’s foundational principle of materiality before the outcomes of its own work.
The Corporate Reporting Dialogue publication can be accessed here
