Related Party Disclosures - Amendments to IAS 24

Date recorded:

The staff presented their analysis of comments received on the IASB's Exposure Draft of Proposed Amendments to IAS 24 Related Party Disclosures - State-controlled Entities and the Definition of a Related Party (ED). The analysis is available in the Observer Notes section of the IASB's website (Agenda Paper 11).

No initial views were expressed by Board members and no decisions were made at this meeting.


State-controlled entities

Most respondents supported the Board's proposal to provide relief from the disclosure requirements in paragraph 17 of IAS 24 for entities that are related simply because of control or significant influence by a common state. The main comments related to this proposal were:

  • To extend the exemption to other type of entities, that is, non-state-controlled entities.
  • To provide the exemption additionally to entities that are jointly controlled by a state.

Most respondents also supported the indicator approach proposed in the ED. The comments mainly related to suggestions for clarifying how and when to apply the indicators; for example:

  • Amending paragraph 17A(b) to include the influence exercised directly by a common state.
  • Clarifying whether the indicators suggested in paragraph 17B of the ED are rebuttable presumptions.


Definition of a related party

In principle most respondents agreed with the Board's proposal to amend the definition of a related party. However, several raised practical and cost-benefit concerns.

Most respondents agreed that. However, a large number of respondents believe that the proposed wording improves the definition but that it is still complex and difficult to apply. Main comments were:

  • Defining the term 'significant voting power'.
  • Reinstating the word 'may' in the proposed definition of 'close members of the family of a person'.
  • Removing inconsistency related to key management personnel in paragraph 9(b)(vii ).


Definition of a related party transaction

Most respondents agreed with the proposal to clarify the definition of related party transaction. However, many were concerned by the new example of a related party transaction proposed in paragraph 20(j) of the ED.


Project plan

The Board agreed to discuss the issues in detail at the October and November meeting. It was noted that because of the large number of issues raised an additional session may be required.

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