GRAP - Guideline - Materiality

CPD hours:  1

Imagine you are trying to piece together a large puzzle. Every piece matters, but not every piece has the same impact on the final picture. Some pieces form the edges and key features, while others fill the background. In financial reporting, the concept of materiality works similarly.

This is where the Guideline on Materiality (GRAP) comes into play. It helps public sector entities decide which information is significant enough to include in financial statements, and which details, while accurate, may not affect the overall picture.

For example, a municipality preparing its annual financial statements may own thousands of small items – from stationery to office furniture – but not all are essential for understanding the entity’s financial position. The guideline provides a framework to assess what is material, ensuring that reports remain clear, relevant, and focused on what truly matters.

By applying materiality, entities can avoid clutter, improve transparency, and communicate financial information meaningfully to decision-makers, stakeholders, and the public. It is about compliance and making financial reporting more understandable, efficient, and accountable.

The Guideline on Materiality ensures that financial reports tell the right story – highlighting the issues and resources that matter most for delivering quality public services and building trust with the community.