Relief for the management entity

Learning objectives

• Determine the disclosures required when key management personnel services are provided by a separate management entity.L3, L4

Normative references

• IAS 24 §17AWhen the entity obtains key management personnel services from another entity (management entity), it is not required to apply para. 17 to the compensation paid or payable by the management entity to its own employees or directors; the amounts incurred by the entity for those services are disclosed under para. 18A. Added by the Annual Improvements 2010-2012 Cycle (December 2013), annual periods beginning on or after 1 July 2014, earlier application permitted (para. 28C).
• IAS 24 §18AAn entity that obtains key management personnel services from a management entity discloses the amounts incurred for those services (provided by the management entity).

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

1 question

• Tarn SA obtains the services of its chief executive from the management entity Finaxis, and has incurred 900,000 for those services for the year. Finaxis pays that executive 420,000 of compensation. Tarn directly employs two other key managers, whose total compensation is 640,000, made up entirely of short-term benefits. Write a note determining what Tarn discloses for key management personnel compensation, separating case facts, rule and judgement.L4