Limits of the exemption

Learning objectives

• Distinguish the transactions covered by the exemption from those that must still be disclosed (persons, other related parties).L2, L3

Normative references

• IAS 24 §25Partial exemption: the entity is exempt from the disclosure requirements of para. 18 in relation to transactions and outstanding balances, including commitments, with (a) a government that has control or joint control of, or significant influence over, the entity, and (b) another entity that is a related party because the same government has control or joint control of, or significant influence over, both entities. The exemption covers only these two categories: transactions with other related parties, for example a member of key management personnel, remain subject to para. 18. Revised in 2009, annual periods beginning on or after 1 January 2011; earlier application of the partial exemption alone is permitted (para. 28).

Original summaries of the paragraphs (reference register), never a quotation of the standard.

1 question

• Marmara SA is controlled by the government. It paid 700,000 to its chief executive, a member of key management personnel, for consulting services separate from his compensation. Which reasoning of the accountant is wrong?L2