The ED addresses a very real practical issue for jurisdictions where state-controlled and state-influenced entities play a major role. We have previously sent an agenda submission to the IFRIC raising our concerns regarding whether compliance by such entities with the disclosure requirements of the current version of IAS 24 is achievable in certain jurisdictions. In general, we are supportive of the approach proposed in the ED for easing the disclosure burden for entities controlled or significantly influenced by the state.

Similarly, we are pleased to see the Board addressing a number of inconsistencies in the definition of a related party and proposing to improve the wording in the Standard. We believe that the proposals would improve the definition, but that it is still unclear and difficult to understand in places. We also find the wording in many areas of the revised Standard somewhat ambiguous and so, in some cases, we are forced to deduce the intentions of the Standard, rather than being able to understand the words used. We believe that the lack of clarity could cause significant problems to readers if English is not their first language and also when the Standard is translated into other languages.

Although we have noted some significant reservations with the ED, we feel that the IASB is heading in the right direction. If the Board focuses on developing the key points, e.g. the definition of 'state' and the application of the indicators of influence, and also works to clarify the language of the Standard, then we are optimistic that it will result in an improvement in disclosures made under the Standard.