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IAS 24Workpapers (Step 4 of 5)

Workpaper template

Step 4 of 5
WorkpaperIAS 24 — Related Party DisclosuresL1 · L2 · L3 · L4

Note on transactions and balances with related parties: content, allowances, categories, arm's length and aggregation

9 missions10 sections to document60 min
Prepared by
AI-assisted draft
Reviewed by
Not reviewed — human review required
Status
Published

Objective of the workpaper

Identify the transactions and balances by category of related party, compute the totals by category, the closing allowance (opening, expense, write-offs) and the net balance of the receivable, assess whether an arm's length statement can be substantiated and whether items may be aggregated (judgements, no threshold imposed), then prepare the illustrative entries and the note. Amounts are case data.

10 sections · 34 blocks · 4 calculations · 4 entries

  • IAS 24 §18
  • IAS 24 §23
  • IAS 24 §9

Work this workpaper as a mission

Each case that uses this template opens in the mission workspace: data, analysis, calculation, entries, conclusion and review, with your progress saved.

9 instances from the cases: the calculations and entries below are run by the calculation engine.

File and entity
Transactions, balances and allowances with an associate and a subsidiary: content of the note, totals by category and arm's length
Case tasks documented here
  • Compute the total of the sales of the year to the associate.
  • Record those credit sales.
  • Compute the total of the services received from the subsidiary.
  • Record the cash settlement of the payable.
  • Recompute the closing allowance and check it against the amount recorded.
  • Compute the net balance of the receivable from Brisval SA.
  • Record the allowance expense of the year.
  • Can an arm's length statement be made for the sales to Brisval SA and for the services of Orlane Services SAS?
1

Facts and data

Inputs

  • Log of transactions with related parties, by category

    Text

  • Sale of goods to a related party

    Number

    90,000

  • Services received from a related party

    Number

  • Payable to a related party settled in cash

    Number

  • Gross balance of the receivable from the related party

    Number

  • Opening allowance

    Number

  • Allowance expense of the period

    Number

  • Receivables written off

    Number

  • Closing allowance recorded (for control)

    Number

  • Item 1 of the category

    Number

    55,000

  • Item 2 of the category

    Number

    35,000

  • Item 3 of the category

    Number

  • Item 4 of the category

    Number

  • Terms and conditions, security, nature of the settlement consideration, guarantees

    Text

  • Evidence, if any, on arm's length conditions

    Text

2

Supporting evidence

Evidence

  • Evidence obtained and referenced (invoices, contracts, balance statements)

    EvidenceRequired

3

Analysis of transactions and balances

Analysis

IAS 24 §18

  • Points reviewed: content of the note

    ChecklistRequired

    • Types of transactions reviewed (goods, services, leases, financing, guarantees, commitments)
    • Amount of the transactions
    • Balances, commitments included, with terms, security and nature of settlement
    • Guarantees given or received
    • Allowances for doubtful debts and expense of the period
    • Information given separately for each category of related party
4

Balances, allowances and totals by category

Calculations

IAS 24 §18

  • Closing allowance recomputed (opening + expense − write-offs)

    CalculationRequired

    Opening allowance ; Allowance expense of the period ; − Receivables written off ; Closing allowance recorded (for control)

  • Control difference between the allowance recorded and recomputed

    CalculationRequired

    Opening allowance ; Allowance expense of the period ; − Receivables written off ; Closing allowance recorded (for control)

  • Net balance of the receivable (gross less allowance)

    CalculationRequired

    Gross balance of the receivable from the related party ; − Closing allowance recomputed (opening + expense − write-offs)

  • Total by category of related party

    CalculationRequired

    90,000

    Item 1 of the category ; Item 2 of the category ; Item 3 of the category ; Item 4 of the category

5

Illustrative entries

Entries

  • Entry: credit sale to a related party

    Entry

    AccountDebitCredit
    Receivable from the related party90,000
    Sales revenue90,000

  • Entry: services received from a related party

    Entry

    Debit Services expense ← Services received from a related party ; Credit Payable to the related party ← Services received from a related party

  • Entry: cash settlement

    Entry

    Debit Payable to the related party cleared ← Payable to a related party settled in cash ; Credit Cash ← Payable to a related party settled in cash

  • Entry: allowance on the receivable

    Entry

    Debit Doubtful debt expense ← Allowance expense of the period ; Credit Allowance for doubtful debts ← Allowance expense of the period

6

Judgements: arm's length and aggregation

Judgment

IAS 24 §23

  • Arm's length statement

    JudgmentRequired

    Substantiated statement made in the note

    Substantiated statement made in the note / No statement made

    Professional judgement: the standard does not require a statement that the terms are arm's length; the statement is made only if it can be substantiated, with no method of proof imposed.

  • Rationale: evidence available or missing

    Text

    PRICE_COMPARISON_WITH_INDEPENDENT_CUSTOMERS

  • Aggregation or separate disclosure

    JudgmentRequired

    Items of a similar nature aggregated / Separate disclosure needed

    Professional judgement: items of a similar nature may be aggregated unless separate disclosure is needed to understand the effects on the financial statements; no numerical threshold is imposed.

  • Rationale: nature of the items and need for understanding

    Text

7

Effect on the financial statements

FS impact

  • Effect derived from the entries

    Table

8

Disclosures about transactions and balances

Disclosure

IAS 24 §18

  • Points to complete

    ChecklistRequired

    • Amounts of the transactions
    • Balances with terms, security and nature of settlement
    • Guarantees given or received
    • Allowances for doubtful debts
    • Expense of the period for bad or doubtful debts
    • Separate information for each category
    • Arm's length stated only if the conditions can be substantiated
    • Aggregation only for items of a similar nature with no need for separate disclosure

  • Draft note on transactions and balances with related parties

    Text

9

Conclusion

Conclusion

  • Amounts, balances, allowances, judgements, entries and note submitted to the reviewer

    ConclusionRequired

10

Normative references

References

  • Paragraphs cited in this workpaper (verification status)

    References

11

Checks and financial statement impact

  • Judgement documentedPass
  • Rationale writtenPass
Assets
90,000
Liabilities
0
Profit or loss
90,000
OCI
0
Equity
90,000