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Related party transaction

A related-party transaction is a transfer of resources or obligations between parties linked by control or significant influence — such as a parent and subsidiary — disclosed because normal arm's-length conditions may not apply.

ByHoang TruongUpdated

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A related-party relationship exists wherever one party can control or significantly influence another — a parent and subsidiary, a company and its directors, or close family members of management. Where that relationship overlaps with an actual transaction between the parties, such as a parent selling goods to a subsidiary below market price, disclosure is required because the terms may not reflect arm's-length conditions.

Where it fits
SubjectFinancial AccountingAdvancedTopicThe Financial StatementsAdvanced

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PracticeCORE

Zircona plc's managing director personally owns a building that Zircona rents for its head office at €180,000 per year — slightly above local market rate. Which requirement under IAS 24 is most relevant to this arrangement?

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