ASPE 3840 - Related Party Transactions

Question 1

Related Party Transactions (ASPE)

Answer 1

• For transactions carried out in the normal course of operations
  o monetary related party transactions, or non-monetary RPT with commercial substance should be recorded at their exchange amount, unless
   it is a non-monetary RPT that is an exchange of a product/property to be resold in the same line of business. This type of RPT will be recorded at carrying amount, adjusted for any additional consideration/
• For transaction NOT in the normal course of business
  o monetary RPT, or non-monetary RPT with commercial substance should be recorded at their exchange amount, IF
   the change in ownership interest in item transferred/service provided is substantive, and
   the exchange amount is supported by independent evidence
• When the RPT has been measured at carrying amount, any difference between the carrying amounts of items exchanged, together with any related tax amounts, shall be booked to equity.

Reference: ASPE 3840.08-.09, .18, .22, .29