Government related entity10/09/2022 0 By indiafreenotes
A reporting entity is exempt from the disclosure requirements in relation to related party transactions and outstanding balances, including commitments, with:
(a) a government that has control or joint control of, or significant influence over, the reporting entity;
(b) another entity that is a related party because the same government has control or joint control of, or significant influence over, both the reporting entity and the other entity.
If a reporting entity applies the exemption above, it shall disclose the following about the transactions and related outstanding balances referred to the above:
(a) The name of the government and the nature of its relationship with the reporting entity (ie control, joint control or significant influence);
(b) The following information in sufficient detail to enable users of the entity’s financial statements to understand the effect of related party transactions on its financial statements:
(i) The nature and amount of each individually significant transaction;
(ii) for other transactions that are collectively, but not individually, significant, a qualitative or quantitative indication of their extent.
Transaction with the government-related entity
The Reporting entity is exempt from the disclosures requirement with the government who has control or joint control or significant influence over the reporting entity and another entity that is a related party because the same government has control or joint control of or significant influence over both the reporting and other entity. As a result of such exemption, the entity need not disclose related party transactions and outstanding balances including commitments. If the above exemption applies, an entity must disclose the following:
- Name of the government and nature of its relationship.
- The nature and amount of each individually significant transaction and for other transactions that are collected, but not individually significant a qualitative or quantitative indication of their extent.
Related party transactions are the transfer of services or obligations, resources between a reporting entity, and related party irrespective of the fact that a price is charged.
The Government refers to government, government agencies, and similar bodies whether local, national, or international.
A government-related entity is an entity that is controlled, jointly controlled, or significantly influenced by the government.
Compensation includes all employment benefits such as short-term employment benefits, post-employment benefits, other long-term employer benefits, termination benefits, and share-based payments.