The International Accounting Standards Board (IASB) today published for public comment proposals to amend the requirements for entities to disclose in their financial statements information about related parties. The proposals are set out in an Exposure Draft of proposed amendments to IAS 24 Related Party Disclosures.
The main change proposed is to reduce the disclosure requirements in IAS 24 for some entities that are related only because they are each state-controlled or significantly influenced by the state. The changes respond to concerns expressed by interested parties about the difficulties that these entities have in obtaining the information required by IAS 24. In many cases, the entities affected may not even know that they are related to others controlled or influenced by the state. The IASB concluded that for those entities affected the cost of complying with IAS 24 is likely to outweigh the benefits of the disclosures to users of their financial statements. The exemption proposed is limited to those circumstances in which it is clear that the related entities are not influencing each other.
The Exposure Draft also proposes to clarify, and remove inconsistencies in, the definition of a related party.
See full Press Release.
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