When an entity has related parties, but does not transact business with them, there is no effect on the profit or loss or dealings of that entity.

Question

Quizplus · Accepted Answer

Even if an entity does not transact business with its related parties, the existence of these relationships must be disclosed as they might affect the decisions of the users of financial statements. The relationships themselves can influence the entity's dealings and financial position, even without direct transactions.

When an Entity Has Related Parties, but Does Not Transact