Last update 31/07/2019
The adding together of individual items that share characteristics and are classified together.
Materiality and aggregation
An entity shall present separately each material class of similar items. An entity shall present separately items of a dissimilar nature or function unless they are immaterial. [IAS 1 29]
Financial statements result from processing large numbers of transactions or other events that are aggregated into classes according to their nature or function. The final stage in the process of aggregation and classification is the presentation of condensed and classified data, which form line items in the financial statements. If a line item is not individually material, it is aggregated with other items either in those statements or in the notes. An item that may not warrant separate presentation in those statements may warrant separate presentation in the notes. [IAS 1 30]
An entity need not provide a specific disclosure required by IFRS1 if the information is not material. [IAS 1 31]
Information is not to be aggregated or disaggregated in a manner that obscures material information and reduces the understandability of financial statements (e.g. aggregating items that have different natures or functions or overwhelming useful information with immaterial information).
Materiality applies to all four primary financial statements and the notes to the financial statements
Even when a standard contains a list of specific minimum disclosure requirements, preparers need to assess whether each required disclosure is material, and consequently whether presentation or disclosure of that information is warranted. This combines with the existing definition of materiality in IAS 1 7, which requires consideration of items both individually and collectively, because a group of immaterial items may, when combined, be material. Preparers also need to consider whether particularly significant items mean that disclosures, in addition to minimum requirements specified in IFRSs, are required to provide an appropriate amount of information.
Aggregation Aggregation Aggregation Aggregation