Materiality Concept as per GAAP
GAAP is a cluster of accounting principles, standards and rules that set forth what entities operating in the United States should use when reporting their financial performance. With materiality being the key feature of GAAP, it helps accountants in selecting data for inclusion in financial statements. The materiality principle is the guiding principle of GAAP regarding the identification and disclosure of financial information. Materiality, however, is not precisely defined under GAAP as it remains a judgment for different users to decide what is relevant and reliable in conforming with the rule.