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| Old GAAP | FRS 102
|
Further Comment On Differences |
| Related Parties | Related Party Disclosures (S.33) | |
| A related party is a person or entity that is related to the entity that is preparing its financial statements.
A person (or a close member of that person’s family) is a related party if that person has control, joint control or significant influence over the reporting entity, or is a member of the key management personnel of the reporting entity or its parent. An entity is a related party if: · it is a member of the same group as the reporting entity; · one entity is an associate or joint venture of the other entity; · both entities are joint ventures of the same third party · one entity is a joint venture and the other is an associate of the same third entity; · the entity is a retirement benefit scheme for employees of the reporting entity (or an entity related to it); if the entity is itself such a scheme, the sponsoring employer is a related party of that scheme; · the entity is controlled or jointly controlled by a related person (see above); · a person having control or joint control over the reporting entity has significant influence over the entity or is a member of its key management personnel (or of its parent). |
Same as old GAAP. | No differences. |
| If there have been material related party transactions, the following are disclosed:
· names of the transacting related parties; · a description of the related party relationship; · a description of the transactions; · the amounts involved; · any other elements necessary for an understanding of the financial statements; · the amounts due to and from related parties at the balance sheet date; · the amounts written off. |
Where there have been related party transactions, disclosure is made of the nature of the relationship, as well as information about the transactions, outstanding balances and commitments necessary for an understanding of the financial statements.
As a minimum, disclosures include: · the amount of the transactions; · outstanding balances (including their terms and conditions, whether they are secured, and details of any guarantees); · provisions for uncollectible receivables; · the expense recognised for bad debts. |
No differences. |
| Disclosures may be aggregated for similar transactions by type of related party.
|
Disclosure is made separately for each of the following categories:
· entities with control, joint control or significant influence over the entity; · entities over which the entity has control, joint control or significant influence; · key management personnel of the entity and its parent; · other related parties. |
This is a new requirement under FRS 102. See example attached which illustrates these requirements (Example 142 – Extract From The Notes To The Financial Statements). |
| Disclosures of key management personnel compensation are not required by FRS 8.
|
An entity discloses key management personnel compensation in total. This is on top of any directors remuneration disclosure requirements under Company Law.
Management personnel is defined in Section 33.6 as ‘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.’ |
This is a new disclosure required in the financial statements. See attached an example of such a disclosure. (Example 142 – Extract From The Notes To The Financial Statements).
|
| No specific requirement under FRS 8 however this disclosure is required under FRS 17 in any event. | Disclosure of pension scheme contributions paid to a pension fund.
|
No differences as this would have been disclosed in any event. |
| Disclosure is not required on the basis of confidentiality which is imposed by statute or company law.
|
No exemption on the grounds of confidentiality in relation to disclosure of related parties. | It was very rare that this exemption could be claimed under old GAAP so it should not impact many entities. However, where it does full disclosure is required, there is no longer an exemption. |
| Irrespective of the existence of transactions, an entity discloses:
· the name and relationship of the controlling party; · the name of the ultimate controlling party, if different. |
An entity discloses the name of its parent and, if different, the ultimate controlling party.
|
No differences. |
| No such exemption available.
|
Exemption from disclosing related party transactions where the related party is a state. | Where such transactions arise, disclosures are required. |
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