Related Parties

Question 1

What is the accounting standard?

Answer 1

IAS 24

Question 2

List all of the potential related parties

Answer 2

• Significant influence - associate, joint control
• Control
• individuals own 20%
• Key management personnel and close family
• Pension funds
• Government bodies own >20%
• 2 companies with a director who is a shareholder of another

Question 3

Who is not necessarily a related parties?

Answer 3

• 2 companies with directors in common
• 2 joint venturers
• providers of finance
• customers/suppliers
• Government department/agencies

Question 4

What disclosure in relation to related parties should be included?

Answer 4

• Name if parent and if different, ultimate controlling party
  If transactions:
• nature of relationship
• amount
• outstanding balances
• Provision for doubtful debts and bad debt expense
• Key management personnel compensation

Question 5

What does IAS 24 required?

Answer 5

Disclosures are required in respect of an entity’s transactions with related parties

Question 6

How is disclosure made?

Answer 6

By category of related party and by major type of transactions

Question 7

How are Government related entities defined?

Answer 7

Entities which are controlled or influenced by the government

Question 8

What is the exemption for IAS 24?

Answer 8

For transactions between government related entities and the government

Question 9

What is the exemption for IAS 24 replaced with?

Answer 9

A requirement to disclose the name of the government and the nature of their relationship and the amount of individually significant transactions