International Financial Reporting Standards_guide.pdf

330 Chapter 31 Related-Party Disclosures (IAS 24)
31.5.4 The amount of related-party transactions and balances must be disclosed whether
these are at arm’s length or not. Transactions can only be described as being at arm’s length
if this can be substantiated.
31.5.5 Compensation of key management personnel should be disclosed in total and for
each of the following categories of compensation:
■ short-term employee benefits;
■ postemployment benefits;
■ other long-term benefits;
■ termination benefits; and
■ share-based payments.
31.5.6 If related-party transactions occur, the following should be disclosed:
■ the nature of related-party relationship;
■ the nature of the transactions;
■ transactions and outstanding balances, including:
– the amount of transactions;
– the amount of outstanding balances;
– terms and conditions related to outstanding balances;
– guarantees given or received on outstanding balances; and
– expense recognized in respect of bad or doubtful debts originating from related
parties.
31.5.7 The items in 31.5.6 should be separately disclosed for:
■ the parent;
■ entities with joint control or significant influence over the entity;
■ subsidiaries;
■ associates;
■ joint ventures in which the entity is a venturer;
■ key management personnel of the entity or its parent; and
■ other related parties.
31.5.8 Items of a similar nature may be disclosed in aggregate except when separate disclosure
is necessary to understand the effects of the transaction on the entity.
31.5.9 Related-party relationships are a normal feature in commerce. Many entities carry on
separate parts of their activities through subsidiaries, associates, joint ventures, and so on.
These parties sometimes enter into transactions through atypical business terms. For these
reasons, knowledge of related parties may affect assessments of the entity by users of the
financial statements, including assessments of risks and opportunities facing the entity.
31.5.10 Related parties have a degree of flexibility in the price-setting process that is not
present in transactions between nonrelated parties. For example, they can use a comparable
uncontrolled price method, resale method, or cost-plus method.