Strict Standards: Only variables should be assigned by reference in /var/www/vhosts/jamesstanley.co.uk/httpdocs/templates/luxon/vertex/responsive/responsive_mobile_sidebar.php on line 8
Blog

Blog

The Accountants for Growth

Simplified Related-Party Disclosures under FRS102:1A

Simplified Related-Party Disclosures under FRS102:1A
The jury is out as to whether the introduction of FRS 102 improves the reported information in financial statements or not. Many commentators believe that the reduction in the disclosed information required under FRS 102 reduces the benefit of financial statements and the information they provide to the reader.
That said many of our clients will be pleased that the requirements to report related party transactions have been significantly reduced and will look to take advantage of the slimmed down information that they need to present in their accounts.

So what are the new requirements for reporting related party transactions?

Firstly, for small entities the list of who qualifies as a related party is reduced to: -
·         Directors of the company
·         Companies in which the entity holds a participating interest (shareholding of 20% or more)
·         Shareholders owning a participating interest in the company (20% or more)

Secondly, only transactions not considered to be at market rates need to be disclosed.

Thirdly, only if the transaction is material to the entity does it need to be disclosed under FRS 102 having considered quantitative and qualitative aspects of the transactions. Care needs to be exercised here as many related party transaction could be considered to be qualitatively material.

The big losers in these reduced disclosures in our opinion, are readers of the accounts who have a real interest in finding out about related party transactions i.e. HMRC.
St Basil's Walk 2017
Preparing accounts on a cash or accrual basis – wh...

Related Posts