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Related parties
The following parties are classified as related
[IAS24R.9]:
| a) |
parties related through control (parent
companies, subsidiaries and fellow subsidiaries)
and parties with joint control or significant
influence over the entity
; |
|
| b) |
associates; |
|
| c) |
joint ventures; |
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| d) |
key management personnel
; |
|
| e) |
close members of families of
individuals referred to in a) or d) above ; |
|
| f) |
an entity where any individuals
referred to in d) or e) above jointly control
or significantly influence, or hold significant
voting power in the entity
;
or |
|
| g) |
post-employment benefit plans
for the benefit of employees of the entity or
related parties of the entity
;
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|
| The following are
no longer exempted from disclosures: |
| |
| a) |
a parent’s separate financial statements
when they are made available or published with
the consolidated financial statements;
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|
| b) |
a wholly-owned subsidiary’s financial
statements if its parent is incorporated in the
same country and provides consolidated financial
statements in that country ;
or
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|
| c) |
state-controlled enterprises’ financial
statements in respect of transactions with other
state-controlled enterprises .
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Presentation and disclosure
Management should disclose the relationship between
parents and subsidiaries. This is required even if
there have not been transactions between the parties
or if there is an agreement preventing the entity
from disclosure .
Management shall also disclose
the name of the entity’s parent and, if different,
the ultimate controlling party. The ultimate
controlling party can be an individual
or a group of individuals who have a contractual
arrangement to act together .
The name of the next most senior parent that
produces financial statements available for public
use shall also be disclosed if neither the entity’s
parent nor the ultimate controlling party does so
[IAS24R.12]
Key management compensation shall be disclosed in
total and for each of the following categories
[IAS24R.16]:
| a) |
short-term employee benefits
; |
|
| b) |
post-employment benefits; |
|
| c) |
other long-term benefits; |
|
| d) |
termination benefits; and |
|
| e) |
equity compensation benefits. |
Where transactions have occurred between related
parties, the nature of the related party relationship
as well as information about transactions and outstanding
balances should be given. Disclosures shall include,
at a minimum [IAS24R.17]:
| a) |
the amount of the transactions ; |
|
| b) |
the amount of outstanding balances
and: |
|
|
(i) |
their terms and
conditions, including whether they are secured,
and the nature of the consideration to be provided
in settlement; and |
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(ii) |
details of any
guarantees given or received; |
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| c) |
provisions for doubtful
debts on outstanding balances; and |
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| d) |
the related expense
for bad or doubtful debts. |
The disclosures are made separately for each category
[IAS24R.18]:
| a) |
the parent; |
|
| b) |
entities with joint control or significant
influence over the entity; |
|
| c) |
subsidiaries; |
|
| d) |
associates; |
|
| e) |
joint ventures in which the
entity is a venturer; |
|
| f) |
key management personnel of
the entity or its parent; and |
|
| g) |
other related parties. |
The disclosure of several transactions between
related parties may be aggregated where separate
disclosure is not required for a proper understanding
of the transactions' effect on the entity [IAS24R.22]
.
Entities shall disclose that related party transactions
were made on terms equivalent to those that prevail
in arm's length transactions if such terms can be
substantiated [IAS24R.21] .
Intra-group transactions in consolidated financial
statements are exempted from the disclosure requirements.
It is assumed that these transactions are eliminated
in the preparation of consolidated financial statements
[IAS24R.4] .
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