Related Parties Disclosure

LouiseR

I'm getting myself a bit confused and it's been a long day!

I am completing Company A statutory accounts and not sure if I need to disclosure transactions made with two other companies as follows:

Company A has 2 shareholders (not directors) and 2 directors (not shareholders), 4 people in total.
Company B has the same director as Company A but is not a shareholder of Company B
Company C has the same director as Company A and is a shareholder of Company C.

Company B and C have both invoiced Company A for services. Do these need to be disclosured as the directors are not shareholders in Company A?

Hopefully someone can make sense of the above!

Thanks

Louise

Steve Collings

Hi,

Yes they do need disclosure. FRS 8 was revised following implementation of Companies Act 2006. The long-winded definitions of a related party (pre CA06) were significantly reduced! Following this "overhaul" if the party is a member of the entity's "key management" (FRS 8 para 2.3) which clearly would refer to a director (directors are also specifically related parties under FRS 8). Therefore Co's B and C become related to Co A.

Hope that helps.

Steve

LouiseR

Yes thank you

Poodle

Hi Steve

Not required for FRSSE?

Steve Collings

FRSSE is only usually reissued every couple of years so sometimes doesn't reflect subsequent amendments to the mainstream FRSs until a revised version of FRSSE is brought out. FRSSE was amended and reissued to take account of Companies Act 2006 requirements (FRSSE (effective April 2008)) - which is why you could not adopt FRSSE early (ie until a/p commencing on or after 6/4/08). FRSSE is merely a condensed version of the mainstream FRSs so in this instance, you would still disclose the above transactions as related party transactions even if you were applying FRSSE.

Regards
Steve