Disclosure standards

Question 1

IAS24 Related Party disclosures:

Answer 1

Related parties typically include individuals or companies with which the reporting entity has a relationship of influence or control with. Shareholders need to be aware of their existence.

Question 2

IAS33 Earnings per Share (EPS):

Answer 2

Is a key shareholder ratio reported in financial statements of quoted companies.

Question 3

Definition of a Related Party:

Answer 3

1.) A person or entity that is related to the entity that is preparing its financial statements.

Question 4

A person/close member of that person’s family is related to a reporting entity if that person:

Answer 4

• has control or joint control over reporting entity
• has significant influence over reporting entity
• is a member of key management personnel of reporting entity or of a parent of the reporting entity

Question 5

An entity is related to a reporting entity if any of the following conditions applies:

Answer 5

• Entity and reporting entity are members of the same group
• One entity is an associate or joint venture of the other entity
• Both entities are joint ventures of the same third party
  -One entity is a joint venture of a third entity and the other entity is an associate of the third entity
• The entity is a post-employment benefit plan for benefit of employees of either the reporting entity or an entity related to the reporting entity
• Entity is controlled or jointly controlled by a person identified as A person/member closely related to entity(previous card).
• A person(member) has significant influence over entity or is member of key management personnel of entity
• Entity provides key management personnel services to reporting entity or parent of reporting entity

Question 6

IAS24 requires an entity to disclose the following:

Answer 6

• Name of its parent and the ultimate controlling party irrespective of whether there have been any transactions
• Total key management personnel compensation(broken down by category-short-term benefits, post-employment benefits, termination benefits and share-based payments)
  -If an entity has related party transactions:
  *nature of related party relationship
  
  • info for users to understand the potential effect of the relationship on financial statements (amount of transactions, amount of outstanding balances,commitments, T&C’s, provisions for doubtful debts)

Question 7

What is is Dilution according to IAS33:

Answer 7

A reduction in earnings per share or an increase in loss per share resulting from the assumption that convertible instruments are converted, that options or warrants are exercised or that ordinary shares are issued upon satisfaction of specified conditions.

Question 8

What is Potential ordinary share according to IAS33:

Answer 8

A financial instrument or other contract that may entitle its holder to ordinary shares.