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.
See it move
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.
Check yourself
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?