RELATED PARTIES lated party — Parti i 1 = 5 ty ies are considered to be related if one party a. The ability to control the other bie p. The ability to exercise significant influence over the other party. ¢. Joint control over the entity. Control is the power over the invest dro ver tee or the power to govern the ioe and operating policies of an entity so as to obtain e = Control'is ownership directly, or indirectly thro idiari r ugh subsidiaries of more than: half of the voting power of an entity. icipate in the financial Significant influence is the power to parti but not control of and operating policy decision of an entity, those policies. Significant influence may be gained by share ownership of 20% or-more. Ifan investor holds, directly or indirectly through subsidiaries, 20% or more of the voting power of the investee, it is presumed that the investor has significant influence, unless it can be dearly demonstrated that this is not the case. Beyond the mere 20% threshold of ownership, the existence of ally evidenced by the following significant - influence is usu factors: a. Representation in the board of directors b. Participation in policy making process ae c. Material transactions between the investor and the investee d. Interchange of managerial personnel " e. Provision of essential technical information Joint control is the contractually agreed sharing of control over an economic activity: ; Scanned with CamScannerExamples of related parties 1, 2 . Associates - meaning the entiti Affiliates - meaning the parent, the gu subsidiaries. investor owns more than 50% of an in ftieeia noes as parent and the investos ieee’ it the subsidiary. The subsidiary is related to the pate, 4 fellow subsidiries of one parent are also related to gotent ang * Othe les over which eis exercises significant influence, Be Tfan investor owns at least 20% of the investee, the j is known as associate, The associate ig related toe investor. The term associate includes the Subsidi, he subsidiaries of the associate, ALY oy Venturers are related to the joint venture because th have joint control of the ‘activities of the Joint venture, However, the fellow venturers are not related to each other, unlike fellow subsidiaries, 2 Other related parties 1 » se Key management Personnel Close family members of key management Personnel 2. The individual's Spouse and children b.. Children of the i dividual's spouse * individual or the individual's spout or shareholders owning at least 20% of the Y. The close family members of such feces also related to the Yeporting entity. eat ‘ee benefit plan for the benefit of employees » the retj contribution on get Ban of an entity is funded bY Such contra nti ; A trustee, gutiOM9 constituts th dled by Yee. Such trust fan Telatod voted nana entity 88 Scanned with CamScannerAEOVMPepe An entity shall disclose the name of the entity's pelated party transaction A related party transaction is q transfer of resources or pligations between rel ‘5 price is charged. lated parties, regardless of whether pAS 24, paragraph 20, provi 5 related party eanaecion vides the following examples of Purchase and sale of goods Purchase and sale of property and other asset Rendering or ‘receiving services Leases x Transfer of research and development License agreement Finance. arrangements, ineludin, i nce. a , ine! g loans and equit: contributions in cash or in kind oe Guarantee and collateral , "Settlement of liabilities on behalf of the entity or by the entity'on behalf of another party. owe Related party disclosures PAS 24, paragraph 12, requires disclosure of related party relationships where control exists irrespective of whether there . have been transactions between the related parties. In other words, relationships between ‘parents and subsidiaries shall be disclosed regardless of whether there have been transactions between those related parties. parent and if different, the ultimate controlling party. ither i arent nor the ultimate controlling party If neither the entity's pa? er public no, EE roduces financial statements available e af the next most senior parent that ‘does 80 shall also be disclosed. ‘ 89 Scanned with CamScannernsaction Disclosures of related party tra ie raph 17, provides that if oy dee bay ae =A ade related parties, a7 €” jelliag forme mae of the related party relations! hip ‘be anes a about the transactions and outstangine nls necessary f., an. understanding of the financial s! As a minimum, the disclosures shall include: a. The amount of the transaction. balance, terms and conditions .d, and nature of consideration of related party transactio, b. The amount of outstanding whether secured or unsecure to be provided in settlement. : The allowance for doubtful accounts related to the outstanding balance. : i i iod in respect of d. The expense recognized during the perio doubtful accounts due from related parties. Disclosures that related party transactions were made on terms equivalent to those that prevail in arm's length transactions are made only if such terms can’ be substantiated: Key management personnel compensation ay ay peceetl 16, provides that an entity. shall disclose agement personnel com ion i ta each of the following categories: oe ee a. Short-term employee benefits ~ b. Postempls ‘ ployment benefi te enefits, for example, retirement Scanned with CamScannerunrelated parties Unrelated parties include the following: 4, Two entities simply because they ha A mariagement personnel in haan, ve a director or key g, Providers of finance, trade unions, public utilities and government agencies in the course of their normal dealings with an entity by virtue only of those dealings. 3. Asingle customer, supplier, franchisor or general. agent with whom an entity transacts’a significant volume of business merely by virtue of the resulting economic dependence. 4 Two venturers simply because they share joint control over a es venture. Fellow venturers are unrelated to each other. ; Transactions with government-related entities A reporting entity is exempted from providing the normal disclosures for transactions with: 5 aA government that has control, joint control or significant. influence over the entity. b. Othex entities controlled, jointly controlled or significantly influenced by the same government. In applying the exemption, the reporting entity is required to disclose only the following: overnment and the nature of the a. The name of.the soy e d relationship with the*reporting entity. b. The information on the nature and amount of each "individually" significant transaction with the government. * 91 Scanned with CamScannerot required sure of related pany, close separate Financia, Related-party disclosures n PAS 24, paragraph 3, requires dis transactions and outstanding bi 9 in or ventiuter. statements of a parent, subsidiary, assoc! up related p; se inti’ i However, Paragraph 4 provides that intragr” ninated in transactions and outstanding balances te ments of the ean preparation of consolidated financial 6 , Pricing policies Accountifg recognition of a transfer of poner 8 normaly paséd ‘on the price agreed upon between ne Lara een unrelated parties, the price is 20 arm's le! pe a degree of flexibility ix Bea gent between unrelated Between related parties, ‘ ae eee that is not pres the price setting ‘process parties. i i f related party PAS 24 did not provide for the measurement 0! r transactions. However, variety of methods is used to price transactions between related parties. 1. Uncontrolled price method - This sets the price by reference to comparable goods sold in an economically comparable market to a buyer unrelated to the seller. _Resale price method — This method is often used where Goods are transferred between related parties before a sale - to'an independent party is made, y THe A the resale price by a margin, representing a2 pany ‘om which the reseller would seek to recover costs - ‘ean appropriate profit, ~ Cost plus meth ‘ appropriate ieee we method seeks to add a2 4N supplier's cost, ‘0 price method Li case of free mrosigy wea, NO price i 7 extension of Provision of tetiagorac, is charged, as in the © credit on a debt. ent services’ and the Scanned with CamScannerpVENTS AFTER REPORTING PERIOD 0, paragra; 7 pase we aes defines events after the reporting period ast Ske oad , er favorable or unfavorable, that occur between of reporting period and the date on which the financial statements are authorized for issue. ‘Types of events after the reporting period Events after the reporting peri 3 adjustment or disclosure. g period may require either a, Adjusting events after the reporting period are those that provide evidence of conditions that exist at the end of reporting period. b, Nonadjusting events after reporting period are those that are indicative of conditions that arise after the end of reporting period. Examples of adjusting events 1. ‘Settlement after the reporting period of a court case because it confirms that the entity already had a present obligation at the end of reporting period. 2, Bankruptcy of a customer which occurs after the reporting period. 3. The determination after the reporting period of the cost of assets purchased or the proceeds from assets sold pefore the end of reporting period. 4. The determination after the reporting, period of the profit sharing or bonus payment if the entity has the present obligation at the end of reporting period to make such payment. = 5. The discovery of fraud or errors that show the ‘financial statements were incorrect. 93 Scanned with CamScannerExamples of nonadjusting events ting period, 1. Business combination after the reP 2. Plan to discontinue an operation. expropriatio, 8. Major purchase and disposal of asset OF Not major asset by government. ‘ nt by a fire a; 4, Destruction of a major production pla fer the reporting period. ‘i tential ordi; 5. Major ordinary share transactions “ ey ‘dinary share transactions after the reportin 6. Antiouncing or commencing the implementation ofa Major restructuring. : ai 7. Abnormally large changes after the reporting: period in asset prices or foreign exchange rates. 8. htorisy into significant commitments or contingent liabilities, for example, by issuing guarantees. 9. Commencing major litigation arising solely from events "that occurred after the reporting period. 10. Change in tax rate enacted or announced after the end of reporting period that has a significant effect on current and deferred tax asset and liability. Financial statements authorized for issue Financial statements are autho of directors reviews them issue, authorized for issue when the board the financial statements-and authorizes In some cases, an entity is requi it i i ' quired to submit its financial statements to the sharchoid i statements have WERK aba = oe iar = me In such cases, the financial st, issue on the dat atements are authorized for the date when ee Iden) the board of directors anid not on rove the financial statements. 94 Scanned with CamScannerustration management of an entity completed draft of the financial ments for tho yen eRaED ee 31, 2021 on February entity annoui ced the } rofit and ieceed financial March 16, 2022. Scanned with CamScanner