Material

A material difference, or a material misstatement, is a difference to a financial figure or KPI (usually in the financial statements) that will affect the way the users interpret and use the information provided.

For example, if profit was reported as £150,000 but was actually £50,000 or a loss, this would be a material misstatement. If profit was reported as £150,000 but was actually £149,300, this would likely be immaterial, because the difference is small.

The threshold by which one decides what is material and what is not is known as materiality.