1 ACCT4104 Advanced Financial Accounting Dr. Winnie S.C.

Leung

CHAPTER 19 – RELATED PARTY DISCLOSURES

Further Practice
Question #1
Parent entity has a controlling interest in Subsidiaries A, B and C and has significant influence over
Associates 1 and 2. Subsidiary C has significant influence over Associate 3.

For Parent’s separate For Subsidiary A’s For Associate 1’s For Parent’s
financial statements separate financial separate financial consolidated
(the reporting statements, which of statements, which of financial statements,
entity), which of the the entities is a the entities is a which of the entities
entities is a related related party? related party? is a related party?
party?
Parent
Subsidiary A
Subsidiary B
Subsidiary C
Associate 1
Associate 2
Associate 3

Examples of written explanations:

Reporting entity: Parent

Related to Parent Explanations Relevant Paragraph
Yes/No
Subsidiary A

Associate 1

Associate 3
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Question #2

In the following scenarios, Yes / No Applicable paragraph for Entity Applicable paragraph for
are Entity B and Entity C B’s financial statements Entity C’s financial statements
related to each other?

(a) Entity A has joint

control over Entity B
and joint control over
Entity C.

(b) Entity A has joint

control over Entity B
and significant
influence over Entity
C.
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Question #3

In the following scenarios, Yes / No Applicable paragraph for Applicable paragraph for
are Entity A and Entity B Entity A’s financial statements Entity B’s financial statements
related to each other?

(a) X controls or jointly

controls Entity A and
X has control, joint
control over Entity B.

(b) X controls or jointly

controls Entity A and
X has significant
influence over Entity
B.

(c) X has significant

influence over both
Entity A and Entity B.

(d) X is a member of key

management personnel
of both Entity A and
Entity B.
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Question #4
A person, X, is the spouse of Y. X has an investment in Entity A and Y has an investment in Entity B.

Spouse

In the following scenarios, Yes / No Applicable paragraph for Entity Applicable paragraph for
are Entity A and Entity B A’s financial statements Entity B’s financial statements
related to each other?

(a) X controls or jointly

controls Entity A and
Y has control or joint
control over Entity B.

(b) X controls or jointly

controls Entity A and
Y has significant
influence over Entity
B.

(c) X has significant

influence over Entity
A and Y has
significant influence
over Entity B.

(d) X is a member of key

management personnel
of Entity A and Y is a
member of key
management personnel
of Entity B.
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Question #5
A person, X, has control over Entity A and is a member of the key management personnel of Entity C.
Entity B has control over Entity C.

KMP

If Entity A is the reporting If Entity B is the reporting If Entity C is the reporting

entity, which of the entities entity, which of the entities entity, which of the entities
is a related party to Entity is a related party to Entity is a related party to Entity
A? B? C?

Entity A
Entity B
Entity C Yes. IAS 24.9(b)(vii)-(a)(i)
Entity A (the reporting
entity) is controlled by
Person X who is a KMP of
Entity C

Examples of written explanations:

Reporting entity: Entity C

Related to Entity C Explanations Relevant Standard

Yes/No Paragraph

Entity A Yes Entity A is controlled by Person X who IAS 24.9 (b)(vi)-(a)(iii)

is a KMP of Entity C (the reporting
entity)

Entity B
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What if:
(a) X has joint control over Entity A.
(b) X is a member of the key management personnel of Entity B and not of Entity C.
(c) X has only significant influence over Entity A.

(a)

If Entity A is the reporting If Entity B is the reporting If Entity C is the reporting

entity, which of the entities entity, which of the entities entity, which of the entities
is a related party to Entity is a related party to Entity is a related party to Entity
A? B? C?

Entity A
Entity B
Entity C

(b)

If Entity A is the reporting If Entity B is the reporting If Entity C is the reporting

entity, which of the entities entity, which of the entities entity, which of the entities
is a related party to Entity is a related party to Entity is a related party to Entity
A? B? C?

Entity A
Entity B
Entity C

(c)

If Entity A is the reporting If Entity B is the reporting If Entity C is the reporting

entity, which of the entities entity, which of the entities entity, which of the entities
is a related party to Entity is a related party to Entity is a related party to Entity
A? B? C?

Entity A
Entity B
Entity C
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