Accounting Standards Board - Technical - Standards in Issue

Related Party Disclosures

FRS 8

Issued: October 1995

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	FRS 8


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The objective of FRS 8 is to ensure that financial statements contain the disclosures necessary to draw attention to the possibility that the reported financial position and results may have been affected by the existence of related parties and by material transactions with them.

Two or more parties are related when at any time during the financial period:

one party has direct or indirect control over the other party; or
the parties are subject to common control from the same source; or
one party has influence over the financial and operating policies of the other party to the extent that that other party might be inhibited from pursuing at all times its own separate interests; or
the parties, in entering a transaction, are subject to influence from the same source to such an extent that one of the parties to the transaction has subordinated its own separate interests

The standard requires the disclosure of:

information on related party transactions; and
the name of the party controlling the reporting entity and, if different, that of the ultimate controlling party whether or not any transactions between the reporting entity and those parties have taken place

The standard gives various exemptions for consolidated financial statements.

FRS 8 is effective for accounting periods ending on or after 23 December 1995. If put into effect as expected in 2003, the proposed standard in FRED 25 'Related Party Disclosures' will supersede FRS 8.

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To find out how to obtain a copy of this FRS, go to Publications.