Question

( c) Why does AASB124 ‘Related Party Disclosure’ include the relatives of key management personnel as related parties? Provide an example

Answer 1

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity.

A related party is a person or entity that is related to the entity
that is preparing its financial statements (in this Standard
referred to as the ‘reporting entity’).
(a) A person or a close member of that person’s family is related to a reporting entity if that person:
(i) has control or joint control of the reporting
entity;
(ii) has significant influence over the reporting
entity; or
(iii) is a member of the key management personnel
of the reporting entity or of a parent of the
reporting entity