What is Related party disclosures?
In short
Companies disclose material related party transactions: the nature of the relationship, a description of the transactions, the amounts involved and any balances due.
Key takeaways
- Transactions can't be described as arm's length unless that can be substantiated.
- Ordinary compensation arrangements and transactions eliminated in consolidation needn't be disclosed.
- Control relationships are disclosed even without transactions, if they could significantly affect the entity.
Where it's tested
FAR: Notes, Subsequent Events & Going Concern — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
For material related party transactions, which disclosure is NOT required and should not be made unless it can be substantiated?