Technical definition
The principle that information matters when omitting, misstating or obscuring it could reasonably influence users' decisions.
How it works
Materiality depends on amount, nature and context; no single percentage works for every case. It affects presentation, disclosure, aggregation and the correction of errors, while never justifying intentional misstatement.
Everyday example
A small amount may still be material when it changes a covenant result or conceals an unlawful payment.
Common pitfall
Immaterial does not mean irrelevant forever, and materiality is not permission to manipulate earnings up to a threshold.