- IAS 24: Related Party Disclosure
Related Party Transaction
- A related party transaction is a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged.
A party is related to an entity if
- The party controls the entity, or is controlled by it.
- It has significant influence over the entity.
- It has joint control over the entity.
- The parties are under common control (i.e. both Subs)
- The party is an associate.
- The party is a joint venture in which the entity is a venturer.
- The party is a member of the key management personnel of the entity or its parent.
- The party is a close family member of any of the above.
Exemptions (i.e. not considered related parties)
- Two entities with a common director or common member of key management personnel (if the director/key management jointly controls both entities, then the two entities are related)
- Two entities where a member of key management personnel of one entity has significant influence over the other entity
- Two venturers that share joint control over a joint venture
- Providers of finance (e.g. bank, bondholders), trade unions, public utilities, Government departments and agencies
- Customers, suppliers, franchisers, distributors or other agents with whom the entity transacts a significant volume of business.
For each category of related parties:
- Nature of relationship
- Amount of transactions (sales / purchases)
- Amount of outstanding balances
- Provisions for doubtful debts and expense recognised in respect of irrecoverable debts due
General disclosure requirements
- Compensation to key management personnel
- short-term employee benefits
- post-employment benefits
- other long-term benefits
- termination benefits
- share-based payment
- Parent and ultimate parent
- Name of Parent, and if different, the ultimate controlling party.