Disclosures

In this lesson

1. 0:00 Related party disclosure requirements overview
2. 0:03 Parent and subsidiary relationship disclosures
3. 0:29 Control relationships and transaction effects
4. 0:45 Key management personnel compensation breakdown
5. 1:13 Other related party transaction disclosures
6. 1:46 Confidentiality and naming conventions

About this lesson

You'll discover the specific rules for disclosing parent and subsidiary relationships, key management personnel compensation, and related party transactions, along with when you can keep certain details confidential. Understanding these disclosure requirements is essential for passing FR, SBR, and SBL papers, as examiners regularly test your ability to identify what must be revealed and what can remain private. The video covers the main categories of related party disclosures. You must always disclose parent and subsidiary relationships, including the names of the parent company and ultimate controlling party, even if no transactions have occurred. For key management personnel—typically directors—you disclose total compensation broken down into short-term benefits like salaries and bonuses, post-employment benefits such as pensions, termination benefits, and share-based payments. For other related party transactions, you disclose the nature, description, amounts, outstanding balances, guarantees, and any doubtful debt provisions, but you're not required to name individual related parties involved. This lesson emphasises the balance between transparency and confidentiality in financial reporting. Whilst users of financial statements need to understand the effects of related party relationships on an entity—including pricing arrangements and control implications—companies can protect some confidentiality by omitting names in certain transactions. Mastering these disclosure rules ensures you can confidently answer exam questions on related party reporting and apply the standards correctly in practice.

Duration: 2m