Related party transaction
IAS 24 requires disclosures about qualifying relationships, transactions and outstanding balances so users can assess their potential effects. Relevant information can include transaction amounts, balances, commitments and terms, subject to the detailed standard and exemptions. Transactions are not exempt merely because management regards them as normal or at market prices. Identify the relationship using the standard’s definition first.
Worked example
A company rents a warehouse from a business controlled by its chief executive. The rent and any outstanding balance are assessed for related-party disclosure even if the rent is comparable to market rates.
Common mistake
Omitting a related-party transaction because no payment was made or because it was conducted on apparently normal terms.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | SBR | Direct | September 2026–June 2027 |