PPT: Accounting Standards (18) | Advanced Accounting for CA Intermediate PDF Download

 Page 1


  
SCOPE AND OBJECTIVES
•
Basically a disclosure standard
•
International Accounting Standard 24 
Related Party Disclosures (IAS 24) 
requires a reporting entity to disclose:
  (a) transactions with its related parties
  (b) relationships between parents and 
subsidiaries irrespective of whether there 
have been transactions between those 
related parties.
Page 2


  
SCOPE AND OBJECTIVES
•
Basically a disclosure standard
•
International Accounting Standard 24 
Related Party Disclosures (IAS 24) 
requires a reporting entity to disclose:
  (a) transactions with its related parties
  (b) relationships between parents and 
subsidiaries irrespective of whether there 
have been transactions between those 
related parties.
  
SCOPE AND OBJECTIVES
•
It ensures that an entity’s financial 
statements contain the disclosures 
necessary to draw attention to the 
possibility that its financial position and 
profit or loss may have been affected by 
the existence of related parties and by 
transactions and outstanding balances, 
including commitments, with such parties
Page 3


  
SCOPE AND OBJECTIVES
•
Basically a disclosure standard
•
International Accounting Standard 24 
Related Party Disclosures (IAS 24) 
requires a reporting entity to disclose:
  (a) transactions with its related parties
  (b) relationships between parents and 
subsidiaries irrespective of whether there 
have been transactions between those 
related parties.
  
SCOPE AND OBJECTIVES
•
It ensures that an entity’s financial 
statements contain the disclosures 
necessary to draw attention to the 
possibility that its financial position and 
profit or loss may have been affected by 
the existence of related parties and by 
transactions and outstanding balances, 
including commitments, with such parties
  
Identification
•
To apply the standard the following need to be identified:
•
(a) related party relationships and transactions 
•
(b) outstanding balances, including commitments, 
between an entity and its related parties
•
The circumstances in which disclosure of the items 
in (a) and (b) is required; and
•
Determining the disclosures to be made about those 
items
•
It applies to consolidated and separate financial 
statement and also to invididual financial statements
Page 4


  
SCOPE AND OBJECTIVES
•
Basically a disclosure standard
•
International Accounting Standard 24 
Related Party Disclosures (IAS 24) 
requires a reporting entity to disclose:
  (a) transactions with its related parties
  (b) relationships between parents and 
subsidiaries irrespective of whether there 
have been transactions between those 
related parties.
  
SCOPE AND OBJECTIVES
•
It ensures that an entity’s financial 
statements contain the disclosures 
necessary to draw attention to the 
possibility that its financial position and 
profit or loss may have been affected by 
the existence of related parties and by 
transactions and outstanding balances, 
including commitments, with such parties
  
Identification
•
To apply the standard the following need to be identified:
•
(a) related party relationships and transactions 
•
(b) outstanding balances, including commitments, 
between an entity and its related parties
•
The circumstances in which disclosure of the items 
in (a) and (b) is required; and
•
Determining the disclosures to be made about those 
items
•
It applies to consolidated and separate financial 
statement and also to invididual financial statements
  
Related party??
•
A related party is a person or entity that is related to 
the entity that is preparing its financial statements  
(reporting entity).
   (a) A person or a close member of that person’s 
family is related to a reporting entity if that person:
   (i) has control or joint control over the reporting 
entity
   (ii) has significant influence over the reporting entity; 
   (iii) is a member of the key management personnel of 
the reporting entity of a parent of the reporting 
entity.
Page 5


  
SCOPE AND OBJECTIVES
•
Basically a disclosure standard
•
International Accounting Standard 24 
Related Party Disclosures (IAS 24) 
requires a reporting entity to disclose:
  (a) transactions with its related parties
  (b) relationships between parents and 
subsidiaries irrespective of whether there 
have been transactions between those 
related parties.
  
SCOPE AND OBJECTIVES
•
It ensures that an entity’s financial 
statements contain the disclosures 
necessary to draw attention to the 
possibility that its financial position and 
profit or loss may have been affected by 
the existence of related parties and by 
transactions and outstanding balances, 
including commitments, with such parties
  
Identification
•
To apply the standard the following need to be identified:
•
(a) related party relationships and transactions 
•
(b) outstanding balances, including commitments, 
between an entity and its related parties
•
The circumstances in which disclosure of the items 
in (a) and (b) is required; and
•
Determining the disclosures to be made about those 
items
•
It applies to consolidated and separate financial 
statement and also to invididual financial statements
  
Related party??
•
A related party is a person or entity that is related to 
the entity that is preparing its financial statements  
(reporting entity).
   (a) A person or a close member of that person’s 
family is related to a reporting entity if that person:
   (i) has control or joint control over the reporting 
entity
   (ii) has significant influence over the reporting entity; 
   (iii) is a member of the key management personnel of 
the reporting entity of a parent of the reporting 
entity.
  
Close Member??
    Close members of the family of a person are: 
    1.Those family members who may be expected to 
influence, or
    2. Be influenced by, that person in their dealings 
with the entity and include:
   (a) that person’s children and spouse or domestic 
partner
   (b) children of that person’s spouse or domestic 
partner
   (c) dependants of that person or that person’s 
spouse or domestic partner