IPSAS Explained: A Summary of International Public Sector Accounting Standards, 2nd Edition

IPSAS 20: Related Party Disclosures

Objective

The objective of IPSAS 20 is to require the disclosure of the existence of related party relationships where control exists. The disclosure of information about transactions between the entity and its related parties is also required in certain circumstances. This information is required for accountability purposes and to facilitate a better understanding of the financial position and performance of the reporting entity. The principal issues in disclosing information about related parties are identifying which parties control or significantly influence the reporting entity and determining what information should be disclosed about transactions with those parties.

The IFRS on which the IPSAS is based

IAS 24, Related Party Disclosures

Content

Principal definitions

Related party: Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions or if the related party entity and another entity are subject to common control. Related parties include:

a) Entities that directly, or indirectly through one or more intermediaries, control, or are controlled by the reporting entity;

b) Associates;

c) Individuals owning, directly or indirectly, an interest in the reporting entity that gives them significant influence over the entity, and close members of the family of any such individual;

d) Key management personnel, ...