A CPA Australia submission issued on 25 May 2007, was sent to the International Accounting Standards Board (IASB) and Australian Accounting Standards Board (AASB), on the proposed amendments to IAS 24 Related party disclosures: state-controlled entities and the definition of a related party.

CPA Australia supports the proposed amendments for the reason that they will provide disclosures of a similar quality to the present requirements.

Should the proposed amendments be approved by the standard setters, state-controlled entities will only be required to disclose related party transactions when the relevant indicators (e.g. ‘business at non-market rates’ and ‘engage in economically significant transactions’) are triggered. This approach will potentially exclude related party transactions which are carried out on normal commercial terms.

Consequently, the proposed amendments will deliver financial reporting that is focused on the provision of relevant information rather than completeness of related party transactions. CPA Australia also encourages the standard setters to consider extending the proposed amendments to apply to non-state-controlled entities.

CPA Australia also supports the proposals to amend and clarify the definition of a related party and the definition of a related party transaction.

To view the submission, please visit the Advocacy section of the website.