The definition of related parties under AASB 124 excludes entities (other than those specified earlier in the relevant paragraph)where the related-party relationship:
A) is a relationship formed more than 5 years prior to the current reporting period.
B) results solely from normal dealings of local governments.
C) is a commonly known and transparent link between entities in the public sphere.
D) is based on a relationship to the directors through marriage only.

Question

Quizplus · Accepted Answer

The definition of related parties under AASB 124 excludes entities where the related-party relationship results solely from normal dealings of local governments. Option A is incorrect as there is no time limit on related-party relationships. Option C is incorrect as transparency and common knowledge of a related-party relationship does not exclude the entity from being considered a related party. Option D is incorrect as the relationship based on marriage only is not relevant to determining related-party status.

The Definition of Related Parties Under AASB 124 Excludes Entities