Explain the Importance of Related Party Disclosures

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The Answer is Relationships and transactions between an entity and related parties,including directors,director related entities and other related entities (including persons),may be of interest to financial report users.In particular,these relationships and transactions may,or may have the capability to,significantly affect (either positively or negatively)the results and financial position of the reporting entity.AASB 124 paras 5 and 6 takes the position that,while related party relationships (including activities conducted through subsidiaries,joint ventures and associates)are a normal feature of commerce and business,these relationships could have an effect on the profit or loss and financial position of the entity.Related parties may enter into transactions that unrelated parties would not,and these transactions may not be entered into on the same terms as they would be with unrelated parties.Related parties may expose an entity to risks,or provide opportunities,that would not have otherwise existed.

Explain the Importance of Related Party Disclosures

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