Chapter 17

Question 1

What is a related party?

Answer 1

Individuals or businesses that exert an influence over reporting entity

Question 2

What are the typical related parties?

Answer 2

Key management personnel
Close family members of key management personnel
Entities that are members of the same group

Question 3

What are close family members?

Answer 3

Children
Spouses
Domestic partners

Question 4

What are some examples of parties that are not related?

Answer 4

Two entities simply because they have a director/member of key management personnel in common
Two JV’s because they share joint control of a JV
Providers of finance
Key customers and suppliers

Question 5

What is a key management personnel?

Answer 5

Those persons having authority and responsibility for planning, directing and controlling the activities of an entity

Question 6

What is a related party transaction?

Answer 6

A transfer of resources, services or obligations between reporting entity and related party, regardless of whether a price is changed

Question 7

What are close members?

Answer 7

Family members who may be expected to influence or be influence by that person in dealings with the entity

Question 8

What must we disclose?

Answer 8

Key management personnel compensation
Short-term employee benefits
Post employee benefits
Other long-term benefits
Termination benefits
Share based payments

Question 9

When there has been a related party transaction what needs to be disclosed?

Answer 9

Nature of relationship
Nature of transaction
Amount of transaction
Any outstanding balances
Any provisions for doubtful debts