eSignature Lawfulness for Business Ethics and Conduct Disclosure Statement in United States

How to eSign a document: eSignature lawfulness for Business Ethics and Conduct Disclosure Statement in United States

the related parties a huge and sensitive topic so let's cover that today I am Sylvia of cpdb box.com we help thousands of people to master IFRS and we can help you too so just head to our website and sign up for our newsletter it's free and packed with practical tips so is24 is one of the oldest standards firstly issued in 1984 and then it was later amended multiple times with the last amendment in 2013 so not much news happening here the objective of is24 let me quote a standard here it is to make sure that entities financial statements contain the disclosures necessary to draw attention to the possibility that its financial position and profit or loss may have being affected by the existence of related parties and by transactions and outstanding balances including commitments with such parties in other words you should be aware that a business might be affected by related parties and how and related party transactions and balances need to be disclosed in both entities separate financial statements as well as Consolidated financial statements but it's here good to know that intra group related party transactions and outstanding balances are eliminated up and consolidation yeah so now who is a related party and is24 gives us really extensive definition but let's focus on Basics here we speak about related parties with reference to the reporting entity always so the one who is presenting the financial statements and there are two main categories of related parties the first one is persons so so people can be related parties which one first of all if that person has control or joint control of the reporting entity then it is of course related party then the person has significant influence over the reporting entity or a person is a member of Key Management Personnel of the reporting entity or its parent we illustrate all these situations in our premium course the fors kid so check that out if you like to get a good RP of that now it does not apply to persons themselves only but to the close family members too so for example Chief Executive Officer of certain company is its related party but also his wife children and other dependents are so the second category of the related parties are entities so companies organizations and other institutions and is24 lists which one so let's go through them members of the same group so for example subsidiaries of the same parent are related parties to each other as well as to the parent next one entity is an associate or join Venture of the other entity or of a member of a group of which the other entity is a member next both entities are join ventures of the same party and similar situation happens when one and entity is an associate of the third entity and the other entity is join Venture of the third entity then they are mutually related next The Entity is a post employment benefit plan for the benefit of employees of either reporting entity or its related party plus here sponsoring employers come into play when we speak about post employment plan itself and here we mean pension plans for examp example next The Entity is controlled or jointly controlled by a person identifying a so if you remember well these are all kinds of persons in the position of related parties whether owners Key Management Personnel or their family members next a person identified in a has significant influence over the entity or is a member of Key Management Personnel of the entity or of a parent of the entity and finally the entity of any member of a group of which it is a part provides Keem management personal services to the reporting entity so the thing is that not only persons but also entities can act as a key management Personnel so here you can see that is24 relists all the potential related parties but on top of that it also provides a guidance about who is not a related party so entities simply because they have a director or other member of Key Management Personnel in common or because a member of Key Management Personnel of one entity has significant influence over the reporting entity and let me give you the illustration here so if Mr bsy is a CEO in Drive Z but at the same time he is a CFO in Wipro or let's say he can also have 30% share in will proo so significant influence Drive Z and wheelpro are not related parties to each other of course Mr busy is related to both of them but mutually they are not related then you can find loads of these simple explanations in the I kit a another situation two Ventures simply because they share joint control over a joint venture they are not related then providers of Finance trade unions Public Utilities departments and agencies of the government that does not control or jointly control or significant influence the reporting entity simply because of the normal dealings with it and finally a customer supplier franchiser distributor or general agent with whom an entity transacts within business and some sort of economic dependent may arise here so if you have one customer only otherwise unrelated this does not make him a related party now you know who the related parties are so what should you disclose what information there are three categories of those the first one being the group relationships so you need to disclose the relationship between the parent and its subsidiaries regardless whether you had transactions or not so here you would need to disclose the names of the parent the ultimate controlling party or the name of the most senior parent depending on circumstances of course the second category of disclosures are those about Key Management Personnel here it's necessary to disclose namely the compensation of Key Management Personnel by the categories of employee benefits under is-9 and IFRS 2 so you disclose the things like salaries long-term benefits post-employment benefits and you can see that remuneration of Key Management Personnel is quite sensitive and therefore this is the separate requirement finally we need to disclose related party transactions if they happened during the reporting period mainly their nature as well as info about those transactions and outstanding balances so for example what specific Ty Al you would disclose as purchases sales of goods either finished or unfinished and purchases and sales of property and other assets rendering or receiving Services leases and other items just to name a few of them you should disclose all this information separately for the categories like the parents subsidiaries ET so on so like this video if you find it useful share it hit the Subscribe button and notification Bell for more tips and tricks plus you are absolutely welcome to join our free newsletter at cpdb box.com and become a pro bye-bye and thanks for watching