ISA 320 · Technology

Materiality Calculator for Technology

Pre-configured for technology entities where revenue better reflects the scale and trajectory of the business than volatile or negative profitability.

ISA 320 · LIVEv2026.04General

Materiality compiled,
not just calculated.

Session
0x4658
Fiscal Year
FY 2026
Benchmark
Profit Before Tax
inputs.conf
methodology.conf
README.md
01// entity— ISA 320.A4
02entity_name=
03fiscal_year_end=
04public_interest=
05first_year=
06industry=preset
suggested → PBT 5% is the standard starting point. Adjust for PIE/first-year.
09// benchmark— ISA 320.A4–A7
10benchmark.type=
11benchmark.amount=
12benchmark.percentage=
5.0%
range 5–10%
13benchmark.rationale=
14percentage.rationale=
Rationale fields · ISA 320.14 documentation
16// methodology— firm overrides
17performance_mat=
18trivial_threshold=
ISA 450.A2
19pm.rationale=
PM rationale · aggregation risk documentation
21// particular_materiality— ISA 320.10 · lower thresholds for sensitive areas
22Users expect full disclosure even of small amounts. ISA 550 significant risks apply.
23Regulatory sensitivity; users sensitive to disclosure precision.
24ISA 570 — qualitative by nature, lower threshold often appropriate.
25Misstatements that flip compliance status are material regardless of size.
26IFRS 8 — user decisions track segment performance.
27Industry-specific: bank capital ratios, insurance solvency, tax provision disclosure.
28Fair value estimates, R&D for pharma, loss reserves for insurance, NAV per share for funds.
Particular materiality checklist · ISA 320.10
30// normalisation— ISA 320.A6 · strip exceptional items
No adjustments. Add a line to exclude restructuring costs, impairments, or one-off gains.
Normalisation adjustments · one-off add-backs
40// prior_year_comparison— ISA 320.12 · year-on-year
41prior_year.amount=EUR
Prior-year comparison · YoY delta warnings
50// sensitivity— ±0.25 to ±2 percentage points
Enter a benchmark amount to see sensitivity analysis.
Sensitivity table · defensive range
60// component_materiality— ISA 600.21–23 · group audits
61group_audit=
Component materiality · ISA 600 group audits
70// revision_log— ISA 320.12–13 · changes during the audit
No revisions logged. Add an entry when new information changes materiality (e.g. actual results diverge from forecast, benchmark misstated, scope change).
Revision log · ISA 320.12 documentation
free tier·5/8 core fieldsEUR·no adj.
previewwp-mat-320-2026.pdf
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Overall materiality
—
Awaiting input
TOTAL
Performance mat.
—
75% · ISA 320.11
Clearly trivial
—
5% · ISA 450.A2
Tolerable misstmt.
—
Derived · 50% of perf.
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Benchmark guidance

Technology companies frequently prioritise growth over profitability, making profit before tax an unreliable or even meaningless benchmark (it may be negative). Revenue provides a more stable and representative measure of the entity's scale.

Choosing the right benchmark

Revenue at 0.5–1% is typical for technology companies. For pre-revenue or very early-stage entities, total expenses or cash burn rate may be the only meaningful benchmark. For mature technology companies with stable profitability, PBT at 5% can be appropriate.

Key audit considerations

Revenue recognition under IFRS 15 is the primary risk area — multi-element arrangements, SaaS revenue timing, usage-based pricing, and contract modifications all introduce complexity.

Capitalisation of development costs under IAS 38 requires judgment about technical feasibility, future economic benefits, and amortisation periods.

Share-based payment expenses (IFRS 2) can be material for technology companies and involve significant estimation.

Deferred tax assets from accumulated losses require assessment of recoverability based on future profitability projections.

Frequently asked questions

What benchmark should I use for technology audits?
Revenue at 0.5–1% is typical for technology companies. For pre-revenue or very early-stage entities, total expenses or cash burn rate may be the only meaningful benchmark. For mature technology companies with stable profitability, PBT at 5% can be appropriate.
What are the key materiality considerations for technology?
Revenue recognition under IFRS 15 is the primary risk area — multi-element arrangements, SaaS revenue timing, usage-based pricing, and contract modifications all introduce complexity. Capitalisation of development costs under IAS 38 requires judgment about technical feasibility, future economic benefits, and amortisation periods. Share-based payment expenses (IFRS 2) can be material for technology companies and involve significant estimation. Deferred tax assets from accumulated losses require assessment of recoverability based on future profitability projections.
How does ISA 320 define materiality?
ISA 320 requires auditors to determine materiality for the financial statements as a whole when establishing the overall audit strategy. The benchmark chosen and the percentage applied depend on the nature of the entity, the needs of financial statement users, and the auditor's professional judgment.

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