• a major business combination;

• the announcement of plans to discontinue an operation;

• purchases or sales of assets;
• classification of assets as held-for-sale in accordance with IFRS 5;
• the destruction of a production plant by fire;
• announcement of or commencement of a major restructuring;
• an issue of shares;
• an announcement of changes to tax rates or laws;
• entering into commitments or contingent liabilities (by, for example, issuing a guarantee);
• the commencement of litigation arising from events after the reporting period.

3.5 DISCLOSURES

Non-adjusting events should be disclosed if non-disclosure could influence the economic decisions of users taken on
the basis of the financial statements.

An entity should disclose the following for each material category of non-adjusting event after the reporting period:

• the nature of the event;

• an estimate of its financial effect or a statement that such an estimate cannot be made.

4. IAS 24 Related Party Disclosure

4.1 OBJECTIVE OF IAS 24

IAS 24 has the objective of ensuring that an entity's financial statements contain the necessary disclosures to draw
attention to the possibility that its financial position and profit or loss may have been affected by the existence of
related parties and by transactions and outstanding balances with such parties.

Parties are considered to be related if one party has the ability to control the other party or to exercise
significant influence or joint control over the other party in making financial and operating decisions.

IAS 24 is primarily a disclosure standard.

Definition:

A related party transaction is a transfer of resources, services, or obligations between related parties,
regardless of whether a price is charged.

4.2 DEFINITION OF RELATED PARTY

A party is related to an entity if:

• directly, or indirectly through one or more intermediaries, the party:

o controls, is controlled by, or is under common control with, the entity (this includes parents, subsidiaries
and fellow subsidiaries);
o has an interest in the entity that gives it significant influence over the entity; or
o has joint control over the entity;

• the party is an associate (as defined in IAS 28 Investments in Associates) of the entity;
• the party is a joint venture in which the entity is a venturer (see IAS 31 Interests in Joint Ventures);
• the party is a member of the key management personnel of the entity or its parent;
• the party is a close member of the family of any individual referred to in (a) or (d);
• the party is an entity that is controlled, jointly controlled or significantly influenced by or for which

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significant voting power in such entity resides with, directly or indirectly, any individual referred to in (d) or
(e); or

• the party is a post-employment benefit plan for the benefit of employees of the entity, or of any entity that is a
related party of the entity.

The following are deemed not to be related parties of an entity:

• two enterprises simply because they have a director or key manager in common;
• two venturers who share joint control over a joint venture;
• providers of finance, trade unions, public utilities, government departments and agencies in the course of their
normal dealings with an enterprise; and
• a single customer, supplier, franchiser, distributor, or general agent with whom an enterprise transacts a
significant volume of business merely by virtue of the resulting economic dependence.

4.3 DISCLOSURE OF RELATED PARTY TRANSACTIONS

As IAS 24 is primarily about disclosing related party transactions there is a significant amount of disclosure
required.

If an entity has entered into related parties transactions during the accounting period, they must disclose the nature
of the related party relationship as well as information about the transactions and outstanding balances necessary for
an understanding of the potential effect of the relationship on the financial statements.

These disclosure would be made separately for each category of related parties and would include:

• the amount of the transactions.

• the amount of outstanding balances, including terms and conditions and guarantees.
• provisions for doubtful debts related to the amount of outstanding balances.
• expense recognised during the period in respect of bad or doubtful debts due from related parties.

IAS 24 provides examples of the types of related party transactions that may be disclosed:

• purchases or sales of goods;

• purchases or sales of property and other assets;
• rendering or receiving of services;
• leases;
• transfers of research and development;
• transfers under licence agreements;
• transfers under finance arrangements (including loans and equity contributions in cash or in kind);
• provision of guarantees or collateral;
• settlement of liabilities on behalf of the entity or by the entity on behalf of another party.