Examples of Materiality
1. Inventory Errors: Miscalculating inventory by a little fraction will not likely be relevant to a small retail shop but is very material in terms of value to a large industrial firm.
2. Legal Settlements: A court settlement sum may be dismissed by big companies with a large economy of scales as an insignificant amount, but the same sum may be of crucial importance to a small firm navigating troubled waters.
3. Revenue Recognition: Discerning a missing profit from a minor contract would not be in proper perspective for a corporation with a recognized name but can be for the sake of a startup or a small business.
4. Depreciation Methods: For example, choosing the method of two depreciation may not be of any significance for assets that have a value less, but it may lead to a big difference in a statement in the case of entities having a higher value of assets.
5. Tax Liabilities: A fiddled dealing of taxes even within a small percentage could very well not make any result to a large corporation with many tax obligations, but it could blow up the business of a small company with limited resources.
6. Employee Benefits: This benefit plan the employee inclusion of expatriates in a small organization comprising a limited number of employees cannot be perceived as material but as major.