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Hello, I have a question in part b of question 29 Egin group in BPP kit.
(1): Doye has 40% of Spade -> This relationship is associate -> NOT disclose the intra-group transactions between both of them. But the answer has written that the disclosure of the transaction. I think that it is not correct.
(2) Egin has 60% of Doye and Doye has 40% of Spade. I am confused that the answer: Egin and Spade is NOT related party ? and the reason for this is not clear. Furthermore, this question is the same case of Atomic & Eye. The answer for NOT related party is not clear.
(3) I assume that Doye has 60% of Spade rather than 40% of Spade, if Egin and Spade is the related party ? I think that it is the related party but I am NOT sure about this.
Hope to see your explanations. Thanks tutor !
(one question per post please)
In RPT questions it is fine to say that X and Y MAY be RP – it is a matter of professional judgement.
Remember that at this level we worry more about the substance of the relationship than any specific % – i.e. does control or influence exist in substance.
Under IAS you MUST disclose transactions with subs and ass – so disclosure would be required in the first scenario above.
All the examiner wants to see is that you know the definitions and can attempt to appy them.
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