Username:
Password:
Forgot Password?

AASB 124 - Related Party Disclosures
Print this Article Print this Article
Email this Article

Summary 
Developments, Key Differences & History 
Compared to IFRS 
Interpretations 
Rejection Notices 
Questions & Answers 
Articles 
AASB website 

 
Currency of material 
This material was last updated in August 2008.  
 
Overview 
AASB 124 Related Party Disclosures is equivalent to IAS 24 of the same name as issued by the International Accounting Standards Board. The objective of paragraphs 1 to 22 of AASB 124 is to ensure that the financial report contains disclosures about related parties, including transactions and outstanding balances with such parties. It is applicable for annual reporting periods beginning on or after 1 January 2005.  
 
 
SUMMARY 
Main Requirements 
The main requirements of AASB 124 are: 
 
Application and Scope (paragraphs Aus1.2-4)
  • This standard applies to all entities, except for not-for-profit public sector entities.
    •  
  • Paragraphs Aus25.1 to Aus25.9.3 applies only to disclosing entities.
    • The disclosures required by paragraphs Aus25.1 to Aus25.9.3 are not required by a parent entity when consolidated financial statements are presented. 
  • This standard is applied in:
    • ­Identifying related party transactions and relationships
      •  
    • Identifying outstanding balances between an entity and its related parties
      •  
    • Identifying circumstances in which disclosure of the above items are required
      •  
    • Determining the disclosures to be made about those items.
Purpose of Related Party Disclosures (paragraphs 5-8) 
Knowledge of related party transactions, outstanding balances and relationships is important to understanding and assessing an entity’s operations. 
 
Definitions (paragraphs 9-11) 
Definitions include compensation, control, key management personnel, related party, director and remuneration. 
 
Disclosure (paragraphs 12-22) 
Includes:
  • Relationships between parents and subsidiaries of the entity, regardless of whether there have been any transactions between the related parties.
    •  
  • Information about key management personnel compensation in total and for certain categories.
    •  
  • Certain information about transactions between related parties and any outstanding balances at reporting date, for each type of related party.
Other Key Management Personnel Disclosures by Disclosing Entities (paragraphs Aus25.1-Aus25.9.3) 
Includes:
  • Details about key management personnel, and any changes after the reporting period and before the financial report is issued
    •  
  • Specific compensation details for each key management person.
    •  
  • Detailed information about the principles of compensation
    •  
  • Information about modified terms of share-based payment transactions
    •  
  • Certain information about equity instruments held, including rights and options
    •  
  • Loan information and other transactions and balances
 
The information provided is a brief summary of the requirements of this standard and is not intended to be used as a substitute for reading the standard itself nor does it attempt to provide any interpretative advice. To apply the standard to their particular circumstances readers are encouraged to read the text of the standard and, if necessary, seek professional advice from a Chartered Accountant or other suitably qualified professional. The Institute expressly disclaims all liability for any loss or damage arising from reliance upon any information or inaccurate statement made in this summary.