Materiality and aggregation of similar items

Learning objectives

• Explain how materiality determines separate presentation or aggregation.L1
• Determine, for a case, whether dissimilar items may be aggregated because they are immaterial.L1, L2, L3

Normative references

• IAS 1 §29Each material class of similar items is presented separately in the financial statements; items of a dissimilar nature or function are presented separately unless they are immaterial; aggregation into classes by nature or function falls within the section on materiality and aggregation (29 to 31).

Original summaries of the paragraphs (reference register), never a quotation of the standard.

3 questions

• Items of a dissimilar nature or function are presented separately in the financial statements, unless they are immaterial.L1
• In its statement of profit or loss, Vega SA presents rent of EUR 410,000, which is material. It also has three small expenses of different natures: subscriptions (EUR 5,000), donations (EUR 4,000) and stamp duties (EUR 3,000). Case convention: none of these three expenses is material, individually or together. How may Vega present these items?L2
• Lumen SA presents an "Other income" line of EUR 150,000, made up of scrap sales (EUR 70,000, every year), operating grants (EUR 60,000, every year) and an insurance indemnity (EUR 20,000, exceptional). Profit for the year is EUR 700,000. Case convention: the analysts who follow Lumen ask for scrap sales and grants separately (case data, not a threshold of the standard). Write a short note stating whether Lumen may keep a single line, distinguishing rule, case facts and professional judgement.L3