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If a single investor has a controlling shareholding in company A and company B.
Company A sells goods to Company B, let’s say a material amount.
Would company A and B be considered a Related Party because they are both owned by a major shareholder? i.e has control and significant influence on both companies?
Therefore disclosure under IAS 24 is required?
Am I correct?
Thank you
P2 student
Hi,
You would have to look at the substance in detail but if the shareholder has a controlling stake in both companies then yes the two companies would be related. You would need to ensure that the shareholder does have control of both companies though.
Thanks
Hi
If Person A is director of Co A and Co B then is Co A and Co B related Parties?
what would the factors influence the assessment?Thanks
Hi,
If you are a director of two companies then the two companies are not necessarily related as it depends on your level of influence/control over each of the two companies. The standard views the situation as not the two not being related parties.
Thanks
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