In question (a)(iii), Bagshot Co (March 2020), part (a)(iii), the requirement is:
"Discuss briefly whether Mrs Shaw’s acquisition of the equity shares in Bagshot Co should be disclosed as a related party transaction."
The model answer considers two possibilities:
Whether Mrs Shaw's 5% shareholding gives her control or significant influence over Bagshot Co.
Whether she qualifies as a related party by virtue of being the spouse of Mr Shaw, assuming he is key management personnel.
My question is regarding the first possibility and the interpretation of IAS 24.
Suppose Mrs Shaw had acquired 55% of Bagshot Co instead of 5%. This acquisition would itself result in her obtaining control and becoming a related party.
Would the acquisition itself then be classified as a related-party transaction, even though Mrs Shaw was not a related party immediately before the acquisition?
More generally, where a transaction itself creates a related-party relationship by giving an individual control or significant influence over an entity, does that very transaction qualify as a related-party transaction under IAS 24?
