Disclosure issues: related party disclosure

Question 1

AASB 124 Para 1 (Objective)

Answer 1

Draw attention to possibility that its financial position and profit/loss may have been affected by existence of related parties and by transactions and outstanding balances with such parties

Question 2

Para 9- Definition of Related Party

Answer 2

A related party is a person/entity that is related to entity preparing its FS
E.g.
- Subsidiaries, associates, entities over which joint control exist;
- Members of key mgmt personnel of entity/parent
- Close members (partner, children, dependents) of family of any individuals mentioned above
- Entities controlled/significantly influenced by key mgmt personnel or close family members
- Post-employment benefit plans for employees

Question 3

Disclosure requirements

Answer 3

Para 13: relationships b/w parents and sub
Para 17: Key mgmt personnel compensation
Para 18: For any related party transactions, details of: (1) nature of relationship; (2) amount of transaction, outstanding balances, terms and conditions; (3) bad and doubtful debts