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Pas 24 Related Party Disclosures

PAS 24 outlines requirements for disclosing related party relationships and transactions. Related parties include entities with common directors or key management, venturers in joint ventures, and close family members of individuals who can influence the entity. Unrelated parties are all parties except joint venturers who share control. Required disclosures for related party transactions include the transaction amounts, outstanding balances, terms and conditions, guarantees, and provisions for doubtful debts. Comparable transactions with unrelated parties do not need to be disclosed. Categories that require separate disclosure are entities with joint control/influence, the parent company, and joint ventures of the entity.

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2K views1 page

Pas 24 Related Party Disclosures

PAS 24 outlines requirements for disclosing related party relationships and transactions. Related parties include entities with common directors or key management, venturers in joint ventures, and close family members of individuals who can influence the entity. Unrelated parties are all parties except joint venturers who share control. Required disclosures for related party transactions include the transaction amounts, outstanding balances, terms and conditions, guarantees, and provisions for doubtful debts. Comparable transactions with unrelated parties do not need to be disclosed. Categories that require separate disclosure are entities with joint control/influence, the parent company, and joint ventures of the entity.

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PAS 24 RELATED PARTY DISCLOSURES

1. Which can be classified as related parties?


a. Two entities simply because they have a director or other key management personnel in common.
b. Public utilities, government departments and agencies.
c. Venturers in relation to the joint venture
d. Two venturers simply because they share joint control over a joint venture.

2. Unrelated parties include all of the following, except


a. Two venturers simply because they share joint control over a joint venture.
b. Providers of finance, trade unions, public utilities and government departments and agencies simply by virtue of their
normal dealings with an entity.
c. A customer, supplier, franchisor or general agent with whom an entity transacts a significant volume of business,
merely by virtue of the resulting economic dependence.
d. Postemployment benefit plan for the benefit of employees of the entity.

3. Close family members of an individual are those who may be expected to influence or be influenced by that individual
in their dealings with the entity. Close family members include all of the following, except
a. The individual’s spouse and children
b. Children of the individual’s spouse
c. Dependents of the individual or the individual’s spouse
d. Brothers and sisters

4. It is the method used in pricing transactions between related parties by making reference to comparable goods sold in
an economically comparable market to a buyer unrelated to the seller.
a. No specific method c. Fixed price method
b. Cost plus 10 % mark-up method d. Uncontrolled price method

5. PAS 24 requires disclosure of compensation of key management personnel. Which of the following would not be
considered “compensation” for this purpose?
a. Short-term benefits b. Share-based payments
c. Termination benefits d. Reimbursement of out-of-pocket expenses

6. If there have been related party transactions during the year, an entity needs to make, at a minimum, certain
disclosures. Which of the following is not a required minimum disclosure?
a. The amount of the related party transactions.
b. The amount of the outstanding related party balances and their terms and conditions along with the details of
guarantees given and received
c. The amount of similar transactions with unrelated parties to establish that comparable related party transactions have
been entered at arm’s length.
d. Provisions for doubtful debts related to the amount of outstanding related party balances and expense recognized
during the year in respect of bad or doubtful debts due from related parties.

7. The minimum disclosures prescribed under PAS 24 are to be made separately for certain categories of related parties.
Which of the following is not among the list of categories specified under the Standard for purposes of separate
disclosure?
a. Entities with joint control or significant influence over the entity.
b. The parent company of the entity
c. An entity that has a common director with the entity
d. Joint ventures in which the entity is a venturer.

ANSWERS:
1. C
2. D
3. D
4. D
5. D
6. C
7. C
8.

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