Industry
↳ Revenue reflects high-volume, thin-margin operations.
Benchmark
Performance Materiality
Reduces the probability that uncorrected misstatements exceed overall materiality.
Clearly Trivial
Misstatements below this need not be accumulated unless qualitatively material.
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Benchmark Guidance
Logistics and transportation companies typically operate on thin margins with high asset intensity and significant lease obligations. Revenue provides the most stable benchmark for materiality.
Choosing the Right Benchmark
Revenue at 0.5–1% is standard for logistics entities. For asset-heavy operators (shipping lines, airlines), total assets at 1–2% is an alternative.
Key Audit Considerations
IFRS 16 lease accounting is typically the most significant area — large fleets under operating leases create substantial right-of-use assets and lease liabilities.
Fleet depreciation policies and residual value estimates require judgment.
Fuel cost hedging instruments require fair value measurement and hedge accounting assessment under IFRS 9.
Revenue recognition for multi-modal shipments spanning reporting periods requires allocation and timing judgments.
For Dutch logistics entities, consider customs duties and import VAT handling, particularly for bonded warehouses.
ISA 320.10 — Determine materiality for the financial statements as a whole when establishing the overall audit strategy.
ISA 320.11 — Determine performance materiality for assessing risks and determining further audit procedures.
ISA 320.A4 — Common benchmarks: PBT, revenue, gross profit, total expenses, total equity, or net asset value.