AASB 124 - Related Party Disclosures - December 2009
Example 3 — Key Management PersonnelExample 3 — Key Management Personnel
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Example 3 – Key Management Personnel
IE9 A person, X, has a 100 per cent investment in Entity A and is a member of the key management personnel of Entity C. Entity B has a 100 per cent investment in Entity C.
Illustration of the definition of related party in relation to key management personnel.
IE10 For Entity C’s financial statements, Entity A is related to Entity C because X controls Entity A and is a member of the key management personnel of Entity C. [Paragraph 9(b)(vi) – (a)(iii)]
IE11 For Entity C’s financial statements, Entity A is also related to Entity C if X is a member of the key management personnel of Entity B and not of Entity C. [Paragraph 9(b)(vi) – (a)(iii)]
IE12 Furthermore, the outcome described in paragraphs IE10 and IE11 will be the same if X has joint control over Entity A. [Paragraph 9(b)(vi)-(a)(iii)] (If X had only significant influence over Entity A and not control or joint control, then Entities A and C would not be related to each other.)
IE13 For Entity A’s financial statements, Entity C is related to Entity A because X controls A and is a member of Entity C’s key management personnel. [Paragraph 9(b)(vii) – (a)(i)]
IE14 Furthermore, the outcome described in paragraph IE13 will be the same if X has joint control over Entity A. The outcome will also be the same if X is a member of key management personnel of Entity B and not of Entity C. [Paragraph 9(b)(vii) – (a)(i)]
IE15 For Entity B’s consolidated financial statements, Entity A is a related party of the Group if X is a member of key management personnel of the Group. [Paragraph 9(b)(vi) – (a)(iii)]