What is the Materiality Concept

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Learn accounting with us today ➡️ https://www.theaccountingstudent.co.uk • WHAT IS THE MATERIALITY CONCEPT? • The materiality concept identifies that some items are of such low value that it is not worth recording them separately because they are not “material”. Just think about it for a minute…does it make sense for a business to record every piece of paper in its office or for a school to include every pen and pencil they have bought in their accounts? The concept can be applied to the accounts of a business. The materiality concept illustrates that low valued fixed assets are not worth recording as fixed assets in the balance sheet of the accounts. Subsequently, the “low value” fixed assets will be treated and recorded as expenses in the profit and loss account. If these items were incorrectly treated as fixed assets instead of expenses, then this could have a big effect on the profits and value of a business. • This video will help you with questions such as what is the materiality concept, what is materiality concept in accounting, what is materiality concept in accounting with example, what is materiality concept with example, what is the materiality concept and examples, what is the materiality concept why is this important, what is the definition of materiality in accounting. • MUSIC CREDIT • ‪@benfrydrums‬ • DISCLAIMER • Our content is to be used as an EDUCATIONAL TOOL that aims to provide a foundation for individuals to learn financial accounting, management accounting and bookkeeping topics as practiced in the United Kingdom. As a result, not all complexities are shown or provided. Examples may include but are not limited to; differences between financial reporting, accounting standards or tax treatments. We are NOT ENGAGED in the providing of accounting, bookkeeping, financial, investment, tax, or other professional services. You should consult with a qualified or professional such as an accountant, business advisor, investment specialist, lawyer, solicitor, etc., with regards to specific facts and situations. • #materiality #accountingconcept #accountingconcepts

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