41061 Unite AR22 HI-RES WEB-READY - Flipbook - Page 175
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the
economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both
in planning the scope of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements
Parent Company financial statements
Materiality
£38.0m (2021: £35.5m)
£37.6m (2021: £31.2m)
Basis for determining
materiality
1% of net assets
1% of net assets
Rationale for the
benchmark applied
We consider net assets to be a critical financial
performance measure for the Group on the basis
that it is a key metric used by management,
investors, analysts and lenders.
As the parent holding company the principal
activity is to hold the investments in subsidiaries.
Therefore, the net assets balance is considered to
be the key driver of the Company’s performance
and the most relevant benchmark for materiality.
In addition to net assets, we consider the European Public Real Estate (EPRA) earnings to be a critical financial
performance measure for the Group and we applied a lower threshold of £8.1m (2021: £5.5m) based on 5% (2021: 5%)
of that measure for testing of all balances impacting this financial performance measure.
Materiality
Group materiality
£38.0m
Component
materiality range
£22.8m to £37.6m
Net Assets
£3,818.5m
Net Assets
Group materiality
EPRA earnings impacting measures
EPRA earnings
£161.9m
EPRA earnings
Account balance
specific materiality
Audit & Risk
Committee
reporting threshold
£1.9m
Account balance
specific materiality
£8.1m
Component
materiality range
£4.8m to £7.7m
Audit & Risk
Committee
reporting threshold
£1.9m
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