FRC shares insights into materiality in corporate reporting
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Published: 29 July 2026
The Financial Reporting Council (FRC) has today published insights to support boards, preparers and investors in the application, and assessment, of materiality within corporate reporting.
The principle of materiality is fundamental to high-quality corporate reporting. When applied successfully, it acts as a lens through which companies can challenge themselves and question if their reporting clearly addresses matters most relevant to shareholders and other primary users of reporting. It enables companies to avoid unnecessary disclosures and helps potential investors to better understand the key value drivers of their business.
The FRC recognises that annual reports have become longer and more complex over time as reporting requirements have expanded and stakeholders have sought additional information. These insights are intended to help companies, investors and other stakeholders by acting as prompts to stimulate thinking and build a clearer understanding of how materiality can be considered in practice. The FRC emphasises that materiality is a matter of judgement, and company directors must take ownership of their reporting to support the production of more concise, coherent and decision-useful annual reports.
Mark Babington, Executive Director of Regulatory Standards“Annual reports should be used as a communication tool, not a compliance checklist. We want to encourage preparers to engage with their investors and challenge themselves on what disclosures tell the most coherent story of their business.
Materiality is not about disclosing everything; it is about disclosing what matters. Companies should be confident in exercising judgement and focusing reporting on information that informs investor decisions and avoiding immaterial disclosures that can reduce clarity.”