Proposal to amend related party disclosure standard
Feb 22, 2007
The IASB has published an exposure draft of proposed amendments to IAS 24 'Related Party Disclosures'.
The amendments would:
- Exempt some state-controlled entities from related party disclosures
- Change the definition of a 'related party'.
Comment deadline is 25 May 2007. The ED is now available for eIFRS subscribers and will be freely available on the IASB's website from 5 March 2007.
|Proposed amendments to IAS 24|
State controlled entities
The ED proposes to reduce the disclosure requirements in IAS 24 for some entities that are related only because they are each state-controlled or significantly influenced by the state. The changes respond to concerns expressed by interested parties about the difficulties that these entities have in obtaining the information required by IAS 24. In many cases, the entities affected may not even know that they are related to others controlled or influenced by the state. The IASB concluded that for those entities affected the cost of complying with IAS 24 is likely to outweigh the benefits of the disclosures to users of their financial statements. The exemption proposed is limited to those circumstances in which it is clear that the related entities are not influencing each other.
Definition of 'related party'
The main amendments to the definition are: