Judgement on the extent of disclosure

Learning objectives

• Assess the extent of the disclosures about government-related entities according to the closeness of the relationship and the significance of the transactions (no threshold is set).L3, L4

Normative references

• IAS 24 §27In determining the level of detail to be disclosed under para. 26(b), the entity uses its judgement, considering the closeness of the related party relationship and other factors relevant to the significance of the transaction, for example: significant in terms of size; carried out on non-market terms; outside normal day-to-day business operations, such as the purchase and sale of businesses; disclosed to regulatory or supervisory authorities; reported to senior management; subject to shareholder approval. The Standard sets no numerical threshold.

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

1 question

• Rhône Énergie is controlled by the government and applies the partial exemption. It has (a) a multi-year supply contract of 120,000,000 with another government-controlled entity, negotiated with the supervising ministry; (b) routine purchases of water and electricity from public entities, at regulated rates, for 1,200,000 in total; (c) a loan of 30,000,000 from a state bank, on market terms. Management hesitates between detailing everything and giving only the government's name. Write a note concluding on the extent of disclosure, separating case facts, rule and judgement.L3