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Related Party Disclosures

RELATED PARTY DISCLOSURES

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Ramesh
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39 views2 pages

Related Party Disclosures

RELATED PARTY DISCLOSURES

Uploaded by

Ramesh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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IPK COLLEGE

1664, JALAN KULIM, 14020 BUKIT MERTAJAM, PENANG


TEL : 012-5203212 / 0125113212 / 04-5512588
www.ipk.edu.my

___________________________________________________________________________________________________________________

CHAPTER 7: RELATED PARTY DISCLOSURES

1. Related party
A party is related to an entity if it either:
๏ controls, is controlled by, or is under common control with, the entity
๏ has an interest in the entity that gives a significant influence over the entity
๏ has joint control over the entity
๏ is an associate (IAS 28 Investment in Associates)
๏ is a joint venture in which the entity is a venturer (IAS 31 Interests in joint ventures)
๏ is a member of the key management personnel of the entity or its parent
๏ is a close family member of any of the above
๏ is a post-employment benefit plan for the employees of the entity or of any entity that is a
related party of the entity

2. Related party transactions


๏ Purchase or sale of goods/components
๏ Purchase or sale of asset/property
๏ Provision and receipt of services
๏ Leasing (operating/finance)
๏ Research and development transfers
๏ Settlement of another party’s liabilities

3. Key management personnel


Those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including any director of that entity.

4. Related party disclosures


Relationships between parents and subsidiaries shall be disclosed irrespective of whether there
have been transactions between those related parties.
๏ Name of entity’s parent and;
๏ If different the ultimate controlling party

Subject: Financial Accounting and Reporting IV (BBAA2043) Page 1 of 2


Prepared by N.Thacharyane
Email : [email protected]
IPK COLLEGE
1664, JALAN KULIM, 14020 BUKIT MERTAJAM, PENANG
TEL : 012-5203212 / 0125113212 / 04-5512588
www.ipk.edu.my

___________________________________________________________________________________________________________________

5. Disclosure of transactions and balances generally


If there have been transactions between related parties, an entity should disclose the nature of
the related party relationships as well as information about the types of transactions and the
outstanding balances necessary for an understanding of the financial statements.

Disclosure should be made irrespective of whether a price is charged.

At a minimum the disclosure should include:


๏ The amount of the transactions
๏ The amount of outstanding balances, including terms and conditions, whether they are
secured and the nature of the consideration to be provided
๏ Provisions for doubtful debts based on the amount outstanding
๏ The expense recognised during the period in relation to bad and doubtful debts

The above should be made separately for each of the following


๏ The parent
๏ Entities with joint control or significant influence over the entity
๏ Subsidiaries
๏ Associates
๏ Joint ventures in which the entity is a venture
๏ Key management personnel
๏ Other related parties

6. Disclosure of key management personnel compensation


Key management personnel compensation in total and for each of the following;
๏ Short-term employee benefits
๏ Post-employment benefits
๏ Other long term benefits
๏ Share based payments

Note: Providers of finance, trade unions, utility providers, government departments, customers
and suppliers are NOT related parties.

Subject: Financial Accounting and Reporting IV (BBAA2043) Page 2 of 2


Prepared by N.Thacharyane
Email : [email protected]

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