Disclosure Requirements for Related Party Transactions in Accounting (IAS 24)

Applicable Standards

  • 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.

Related Party

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.

Disclosure Requirements

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.




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