IAS 24 Related Party Disclosures Quiz

What is the objective of International Accounting Standard 24?

• To ensure that an entity’s financial statements contain the disclosures necessary to draw attention to the possibility that its financial position and profit or loss may have been affected by the existence of related parties and by transactions and outstanding balances with such parties.

• To provide guidelines for preparing financial statements for government-related entities.

• To simplify the definition of ‘related party’ and to provide an exemption from the disclosure requirements for some government-related entities.

• To address the disclosures in government-related entities.

When should an entity apply International Accounting Standard 24?

• Prospectively for annual periods beginning on or after 1 January 2011.

• Retrospectively for annual periods beginning on or after 1 January 2014.

• Prospectively for annual periods beginning on or after 1 January 2014.

• Retrospectively for annual periods beginning on or after 1 January 2011.

What is the definition of a related party according to IAS 24?

• A person or entity that is a member of the key management personnel of the entity that is preparing its financial statements.

• A person or entity that has control over the entity that is preparing its financial statements.

• A person or entity that is related to the entity that is preparing its financial statements.

• A person or entity that is a member of the same group as the entity that is preparing its financial statements.

What type of compensation should an entity disclose for key management personnel?

• Only termination benefits.

• Short-term employee benefits, post-employment benefits, other long-term benefits, termination benefits, and share-based payment.

• Only short-term employee benefits and post-employment benefits.

• Only share-based payment.

When is an entity exempt from the disclosure requirements of related party transactions and outstanding balances with a government-related entity?

• When the government has significant influence over the reporting entity.

• When the government has control of the reporting entity.

• When the government has control or joint control of, or significant influence over, the reporting entity.

• When the government has control or joint control of, or significant influence over, the reporting entity and another entity related to the reporting entity.

What should an entity disclose about related party transactions and outstanding balances with a government-related entity if it applies the exemption in paragraph 25?

• The name of the government and the nature of its relationship with the reporting entity, and the nature and amount of each individually significant transaction.

• The name of the government and the nature of its relationship with the reporting entity, and the amount of outstanding balances.

• The name of the government and the nature of its relationship with the reporting entity, and the amount of outstanding balances and guarantees given or received.

• The name of the government and the nature of its relationship with the reporting entity, and the amount of outstanding balances and provisions for doubtful debts.

What is the purpose of related party disclosures according to IAS 24?

• To provide guidelines for preparing financial statements for government-related entities.

• To simplify the definition of ‘related party’ and to provide an exemption from the disclosure requirements for some government-related entities.

• To address the disclosures in government-related entities.

• To draw attention to the possibility that an entity’s financial position and profit or loss may have been affected by the existence of related parties and by transactions and outstanding balances with such parties.

What should an entity disclose about key management personnel compensation?

• In total and for each of the following categories: short-term employee benefits, post-employment benefits, other long-term benefits, termination benefits, and share-based payment.

• Only in total for all categories combined.

• Only for short-term employee benefits and post-employment benefits.

• Only for share-based payment.

When should an entity apply the amendments to IFRS 10, IFRS 11, and IFRS 12?

• When it applies IFRS 10, IFRS 11, and IFRS 12.

• For annual periods beginning on or after 1 January 2011.

• For annual periods beginning on or after 1 July 2014.

• For annual periods beginning on or after 1 January 2014.

What is the classification of amounts payable to, and receivable from, related parties in the different categories as required in paragraph 19?

• An extension of the disclosure requirement in IAS 27 Separate Financial Statements for information to be presented either in the statement of financial position or in the notes.

• An extension of the disclosure requirement in IAS 1 Presentation of Financial Statements for information to be presented either in the statement of financial position or in the notes.

• An extension of the disclosure requirement in IFRS 10 Consolidated Financial Statements for information to be presented either in the statement of financial position or in the notes.

• An extension of the disclosure requirement in IFRS 12 Disclosure of Interests in Other Entities for information to be presented either in the statement of financial position or in the notes.