Who is a related party?
A person, or a close member of that person's family such as a spouse, partner, child or dependant, is a related party if they control or jointly control the company, have significant influence over it, or are a member of the key management personnel of the company or its parent. An entity is a related party if it is a member of the same group; an associate or joint venture of the company or of a group member; a joint venture of the same third party; a post-employment benefit plan for employees of the company or a related entity; controlled or jointly controlled by a related person; significantly influenced by, or with key management including, a person who controls the company; or provides key management personnel services to the company. See IFRS 10 control and joint arrangements and associates.
Who is not a related party?
Two entities are not related simply because they share a director or other key manager, or because a key manager of one has significant influence over the other. Providers of finance, trade unions, public utilities and government departments are not related parties merely because of their normal dealings with the company, even if they affect its freedom of action. Nor is a customer, supplier, franchisor or agent with whom the company does a large volume of business, simply because of the economic dependence that results.
IAS 24 in practice: sorting a company's counterparties
A listed manufacturer, 60% owned by a holding company controlled by its founder, reviews its counterparties.
| Counterparty | Related? | Why |
|---|---|---|
| Holding company | Yes | Parent; disclosed with the founder as ultimate controlling party, even without transactions |
| Associate owned 30% | Yes | Associate of the company |
| Consultancy owned by the finance director's spouse | Yes | Controlled by a close family member of key management personnel |
| Staff pension plan | Yes | Post-employment benefit plan for the company's employees |
| Main bank, lending on normal terms | No | A provider of finance in the normal course of business |
| Supplier sharing one non-executive director | No | Sharing a director does not by itself make entities related |
For each related party category, the company discloses the transactions in the year, such as purchases of consulting services and sales to the associate, the balances outstanding at the year end, their terms and any guarantees. It does not state that transactions were on arm's length terms unless it can substantiate that.
What must be disclosed about key management personnel?
Key management personnel are those with authority and responsibility for planning, directing and controlling the company's activities, directly or indirectly, including directors. Their compensation is disclosed in total and by category.
| Category | CU thousand |
|---|---|
| Short-term benefits | 1,800 |
| Post-employment benefits | 200 |
| Share-based payment | 400 |
| Termination benefits | 0 |
| Total | 2,400 |
Amounts follow the measurement in IAS 19 and IFRS 2; see IAS 19 employee benefits and IFRS 2 share-based payment.
What is the government-related entity exemption?
A company controlled, jointly controlled or significantly influenced by a government is exempt from the detailed disclosures of transactions and balances with that government and with other entities related to the same government. Instead, it discloses the name of the government and the nature of the relationship, and the nature and amount of each individually significant transaction, plus a qualitative or quantitative indication of the extent of collectively significant ones.
How does IAS 24 compare with ASC 850?
The disclosures are similar in purpose. The main difference is key management compensation: US GAAP does not require it in the financial statements, because SEC registrants disclose executive pay in their proxy statements. US GAAP also has no general exemption for government-related entities. See IFRS vs US GAAP key differences and ASC 850 related party disclosures.
Need help applying the standards?
Our Chartered Accountants help finance teams and students apply IFRS and US GAAP to real transactions.
Questions people ask
Who is a related party under IAS 24?
A person or close family member who controls, jointly controls, significantly influences or is key management of the company, and entities such as group members, associates, joint ventures, staff pension plans and entities controlled by related persons.
Is a bank a related party?
Not merely because it provides finance in the normal course of business.
What must be disclosed about key management personnel?
Their compensation in total and by category: short-term benefits, post-employment benefits, other long-term benefits, termination benefits and share-based payment.
Must the parent be disclosed if there were no transactions?
Yes. The name of the parent and, if different, the ultimate controlling party are always disclosed.
Sources
Every fee, date and rule on this page was taken from these official and primary sources.
- IFRS Foundation: IAS 24 Related Party Disclosures
- Financial Accounting Standards Board: Accounting Standards Codification
Rules and fees change. If you are reading this long after October 21, 2026, confirm the figures with the source before you rely on them.
Related guides
More in IAS 24
This guide is general information. It is not tax or legal advice for your situation.