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IAS 24 — Definition of close members of the family of a person

Date recorded:

This issue was most recently discussed by the Committee at its meeting in January 2015.  In their discussions, the Committee observed that the definition of close members of the family of a person in paragraph 9 of IAS 24 was expressed in a principle-based manner and involved assessing whether a family member was expected to influence, or be influenced by, a person.  The Committee also observed that this assessment involved the use of judgement to determine whether members of the family of a person were related parties or not, and that the list in paragraph 9 of IAS 24 was non-exhaustive and did not preclude other family members from being considered close members of the family of a person.  On the basis of this discussion, a tentative agenda decision was issued, whereby the Interpretations Committee would not add the request for clarification to its agenda.  The purpose of this agenda paper was to provide an analysis of the comments received on the tentative agenda decision, and to set out the wording for the final agenda decision.  The Technical Manager introduced the agenda paper and asked the Committee members whether they agreed with the staff recommendation to finalise the agenda decision – as set out in Appendix A of the agenda paper.

A Committee member noted that he agreed with the proposed agenda decision because he viewed the definition as containing a principle and a rule.  He highlighted the fact that one of the edits made in the draft final agenda decision had resulted in a circular sentence, as it now read that the list of close members would be considered close members.  He noted that what was intended was that the list of family members would be considered close members.  The Chairman agreed that this needed to be corrected.

Another Committee member noted that he did not disagree with the conclusion that the definition contained both a principle and a rule, but suggested improvements to the way this was expressed in the agenda decision.  He noted that one paragraph talked about this being expressed in a principle-based manner, but in the next paragraph the rule was brought in.  He suggested that it would be better to connect the two in the same sentence.

It was agreed to update the decision to articulate clearly in one place that there is a principle, that there is also a list of people scoped in (the rule), and that this list is non-exhaustive.

Correction list for hyphenation

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