Question

Lord Co is jointly controlled by Ms Smith and Mr Jones. The directors of the company are Ms Smith, Mr Jones and Miss Hatchett. Which one of the following transactions entered into by Lord Co must IAS 24 disclosures in respect of related parties be provided for?

which one

1-The transfer of goods at market prices by Lord Co to another entity controlled by Ms Smith

2-The provision of services at no cost by Lord Co to a government department

3-The purchase of goods from a supplier that provides more than 50% of Lord Co's raw materials

4- The sale of goods to another company that Miss Hatchett is a director of

Answer 1

IAS 24 disclosures in respect of related parties to be provided for;

1-The transfer of goods at market prices by Lord Co to another entity controlled by Ms Smith.

This is because, here Ms Smith have joint control over Lord Co which is the reporting entity. And Lord Co enters in to a transaction with another entity which is controlled by Ms Smith, so that there is a significant influence by Ms Smith over the entity or Ms Smith is a key managerial person. So that Lord Co and the other entity are related parties.