Information is considered material if: it would have a bearing on decisions of those who use the financial statements. there is a substantial likelihood that a reasonable investor would not be concerned about the information. an item is so insignificant that users would likely ignore it. the FASB explicitly rules the transaction or item to be material.

Information is considered material if: it would have a bearing on decisions of those who use the financial statements. there is a substantial likelihood that a reasonable investor would not be concerned about the information. an item is so insignificant that users would likely ignore it. the FASB explicitly rules the transaction or item to be material.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter12: Liabilities: Off-balance-sheet Financing, Retirement Benefits, And Income Taxes

Section: Chapter Questions

Problem 3Q

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Information is immaterial if omitting it or misstating it could influence decisions that users make on the basis of the financial information of a specific reporting entity. True False
Something is deemed to be 'material' if its omission, non-disclosure or misstatement is likely to affect economic decisions or other evaluations made by users entitled to rely on the financial statements. Select one alternative: True False
When an event impacts a financial statement element, it should be recognized in the accounting records even if reliability of the amount is questionable. True False
How can a misstatement in one financial statement, whether intentional or not, affect a presentation in another financial statement?
Application of the full disclosure principle requires that the financial statements be consistent and comparable. is violated when important financial information is buried in the notes to the financial statements. is theoretically desirable but not practical because the costs of complete disclosure exceed the benefits. is demonstrated by the inclusion of information such as contingencies.
Are non-IFRS financial data different from the IFRS financial information? How may RG230 be used to minimize the disclosure of non-IFRS financial information that may be misleading to investors?
Hedging refers to a transaction that avoids any financial risks. True or False
A misstatement in the financial statements can be considered material if knowledge of themisstatement will affect a decision of A. an accountant. B. the PCAOB. C. the SEC. D. a reasonable user of the financial statements
With respect to the concept of materiality, which of the following statements is correct?a. Materiality depends only on the dollar amount of an item relative to other items in the financial statements.b. Materiality depends on the nature of a transaction rather than the dollar amount of the transaction.c. Materiality is determined by reference to AICPA guidelines.d. Materiality is a matter of professional judgment.
Which of the following does not require disclosure in the financial statements? choices: There is a present obligation that probably requires an outflow of resources that can be measured reliably. There is a present obligation that probably requires an outflow of resources but the amount cannot be measured reliably. There is a possible obligation or a present obligation that may, but probably will not require an outflow of resources There is a possible obligation or a present obligation where the likelihood of an outflow of resource is remote.
Ay 2. Discuss the importance of disclosing information and the potential benefits/pitfalls of not disclosing material facts in a transaction.
In IFRS, the conceptual framework indicates appropriate accounting when a more specific accounting standard does not apply. True False

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		it would have a bearing on decisions of those who use the financial statements.
		there is a substantial likelihood that a reasonable investor would not be concerned about the information.
		an item is so insignificant that users would likely ignore it.
		the FASB explicitly rules the transaction or item to be material.