1. one party has direct or indirect control over the other party; or
   
2. the parties are subject to common control from the same source; or
   
3. 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
   
4. 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 interest
   
   

1. information on related party transactions; and
   
   
2. 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.

Amendment to FRS 8

The ASB issued an Amendment to FRS 8 'Related Party Disclosures' in December 2008. This Amendment simply reflects the minimum necessary to comply with legal requirements on the definition of a related party and an exemption for wholly-owned subsidiaries in the Large and Medium-sized Companies and Groups (Accounts and Reports) 2008 Regulations. Medium-sized companies are still required to comply with FRS 8 as amended in December 2008.

Small companies applying the Financial Reporting Standard for Smaller Entities (FRSSE) remain exempt from FRS 8, but are still required to apply the provisions on related party disclosures set out in Section 15 of the FRSSE. Given that the FRSSE already contains a simplified definition of ‘related parties’, the Board has no immediate plans to amend that definition in the light of the amendments made to FRS 8 in December 2008.