Related party Transactions Flashcards
What are the two ways under ASPE to measure RPT
Carrying amount - the amount the item was recorded at by the transferor
Exchange amount: the amount of consideration paid as agreed to by the related parties. (the FMV u get from the other guy) - sales price - both party records this
Using the carrying amount, how do you record any differences between the carrying amounts of items exchanged?
It is chargd to equity. gains are credited to contribution surplus, losses are first debited to existing CS, then the remainder to RE
What if the exchange amount is used?
the gain or loss is recognized in income for the period. . Charge what you received into revenue and then dr the asset. COGS to what you gave them and remove from inventory
what are the steps in assessing which method to use?
Are the parties related?
Is the transaction in the normal course of operations
Is the change in the ownership interest in the item transferred substantive?
is the amount of the exchange supported by independent evidence
Is the transaction a non-monetary exchange or transfer of a non-monetary asset?
