ASB publishes Amendment to FRS8

From Accountingnet.ie

Financial Reporting
ASB publishes Amendment to FRS8
By S Heaphy
Dec 8, 2008 - 8:04:00 AM

The Accounting Standards Board (ASB) has today issued an Amendment to Financial Reporting Standard (FRS) 8 ‘Related Party Disclosures’. The Amendment reflects changes to the law introduced by ‘The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008’ (the Regulations).

In particular, the Amendment:

changes the definition of ‘related party’ in FRS 8 to be the same as that in the law; and
provides an exemption only for transactions entered into between two or more members of a group, provided that any subsidiary undertaking which is a party to the transaction is wholly-owned by such a member. This is a change from FRS 8, which provided a scope exclusion for 90 per cent subsidiaries.

The Regulations include a requirement for particulars to be given in the notes to the accounts of transactions which an entity has entered into with a related party, where such transactions are material and have not been concluded under normal market conditions. The Amendment clarifies that this requirement will be met by complying with FRS 8, which requires disclosure of all material related party transactions.

The ASB consulted on the definition of related party in both Financial Reporting Exposure Draft (FRED) 25 (in May 2002) and FRED 41 (in July 2007), and considers that, in light of this consultation and the fact that constituents were supportive of the proposal, a further exposure period is not necessary for this Amendment.

The Amendment is effective for accounting periods beginning on or after 6 April 2008.