Chapter 27 - Related Parties

Question 1

Related Party

Answer 1

Maybe influenced by related party transactions

Question 2

Related party rules in own accounts

Answer 2

> Transactions, balance stay in the accounts

> Disclosed as being related party transactions

Question 3

Related party rules in group accounts

Answer 3

All intragroup transactions and balances are eliminated

Question 4

Related party conditions

Answer 4

> Control / Controlled
Under common control
Has significant influence

Question 5

Types of related parties

Answer 5

1) Subsidiaries
2) Associate
3) Joint Venture
4) Key Management
5) Close family of key management
6) A post-employment benefit plan

Question 6

Not necessarily related parties

Answer 6

1) Two entities with a common director
2) Two joint venturers
3) Providers of Finance
4) A big customer, supplies

Question 7

Disclosures

Answer 7

1) The nature of the related party transactions
2) Name of the entity’s parent and the ultimate controlling party
3) information about the transactions and outstanding balances

Question 8

Disclosures in individual accounts

Answer 8

Disclose related party transactions / outstanding balances of parent, venturer or investor

Question 9

Disclosures in group accounts

Answer 9

The intragroup transactions and balances would have been eliminated

Question 10

Related Parties Example

Answer 10

> Spouse of Director
Subsidiary
Holding Company