ias 24 related party transactions
TRANSCRIPT
05/02/2023
IAS 24 RELATED PARTY TRANSACTIONS
IAS 24 RELATED PARTY TRANSACTIONS
05/02/2023IAS 24 RELATED PARTY TRANSACTIONS
SCOPE
Disclose in
separate FS
(IAS 27)
Related party
transactions and balances
Investor
Venturer
Parent
ID RP
relation-ship
s ID RP
transac-tions
ID RP
balances
Circum-stances for
disclosur
e
Required
disclosure
05/02/2023IAS 24 RELATED PARTY TRANSACTIONS
Definitions
Related Party: one party is directly or indirectly under control, joint control or significant influence of another
Parent
Subsidiary
Post-Employment
Benefit Plan
Associate
IAS28
Joint venture IAS 31
Family/ Management personnel
Direct control
Common control/Joint control
Indirect control/significant influence
05/02/2023IAS 24 RELATED PARTY TRANSACTIONS
Definitions
Close members of family: influence or influenced by shareholder
Individual
Domestic partner
Children of DP
Dependants
Children
Other dependants
05/02/2023IAS 24 RELATED PARTY TRANSACTIONS
Definitions
Compen-sation: Employee Benefits IAS 19 and Share-based payment IFRS2; conside-ration for services rendered
Short term employee benefits Wages, salary & bonuses Social security contributions Paid annual and sick leave (< 12 months) Non-monetary benefits (medical, housing, cars,
goods) Post-employment benefits
Pensions, life insurance & medical Termination benefits Long-term benefits
Long service leave, disability benefits Profit share, bonus, deferred compensation > 12
months Share-based payment
05/02/2023IAS 24 RELATED PARTY TRANSACTIONS
Other definitions Related party transaction: transfer resources,
services and obligations Control: power to govern financial and operating
policies to obtain benefits Joint control: contractually agreed sharing of control
over economic activity Key management personnel: authority and
responsibility for planning, directing and controlling activities and directors
Significant influence: power to participate in financial and operating policies via share ownership, statute or agreement
05/02/2023IAS 24 RELATED PARTY TRANSACTIONS
Excluded from definition of related party
Substance over legal form Two entities that share a director of member of
key management personnel Two entities that share control over a joint venture Providers of finance Trade unions Public entities Government Economically dependent entities (agent,
franchisor, customer, distributor)
05/02/2023IAS 24 RELATED PARTY TRANSACTIONS
Disclosures Name of the parent or ultimate controlling party Most senior parent that produces consolidated financial
statements available for public use IAS 27, IAS 28 & IAS 31: listing and description of
significant investments in subsidiaries, associates and jointly controlled entities
Key management personnel compensation Total Short-term employee benefits Post-employment benefits Other long-term benefits Termination benefits Share-based payment
05/02/2023IAS 24 RELATED PARTY TRANSACTIONS
Disclosure Effect of a related party relationship on
the FS Nature of relationship Information about transactions
Amount Outstanding balances
Terms and conditions Security Nature of settlement Balances included in provision for doubtful
debts Balances included in bad debt expense
05/02/2023IAS 24 RELATED PARTY TRANSACTIONS
Disclosure Separate disclosure for categories:
Transactions with parent Transactions with venturer with joint control
or investor with significant influence Subsidiaries Associates Key management of entity and its parents Other related parties
05/02/2023IAS 24 RELATED PARTY TRANSACTIONS
Examples of transactions to disclose
Sales and purchases Goods/property/assets/services
Leases Research and development Licence agreements Finance arrangements Guarantees and collateral Settlement of liabilities Participation by group in defined benefit plan
05/02/2023IAS 24 RELATED PARTY TRANSACTIONS
How much detail?
Disclose transactions are at
arm’s length if evidence supports it
Aggregate similar items unless
separate disclosure aids understanding
of effect on FS
05/02/2023IAS 24 RELATED PARTY TRANSACTIONS
Summary Related party transactions should be disclosed in each
separate set of financial statements of related parties Related parties have control or significant influence
over each other, including entities and individuals who control them
Disclose all significant transactions with group entities, investors, investees and key management personnel
Disclose in sufficient detail to understand effect on performance and position of the entity
Minimum disclosures set out in IAS 24 for each type of related party