Wiley International Trends in Financial Reporting under IFRS: Including Comparisons with US GAAP, Chinese GAAP, and Indian GAAP

CHAPTER 39

RELATED PARTY DISCLOSURES (IAS 24)

1. OBJECTIVE

1.1 This Standard prescribes the disclosures required to draw attention to the possibility that the financial position and results of operations of an entity may have been affected by the transactions and outstanding balances with related parties.

2. SYNOPSIS OF THE STANDARD

This Standard, summarized next, deals with related party transactions and balances in an entity’s financial statements.

2.1 This Standard should be applied to

• Identify related party relationships and transactions
• Identify outstanding balances between an entity and its related parties
• Identify the circumstances in which disclosure of listed items are required
• Determine the disclosures that are to be made about those items

2.2 A related party transaction is a transfer of resources, services, or obligations between related parties, regardless of whether a price is charged.

2.3 Parties are considered to be related if one party has the ability to control the other party or to exercise significant influence or joint control over the other party in making financial and operating decisions.

Under this Standard, a party is related to an entity if

(i) The party directly, or indirectly (through intermediaries) controls or is controlled by, or is under common control with the entity; has an interest in the entity that gives it significant influence over the entity; or has joint control over the entity;

(ii) The party is an associate (as defined in [International ...