Business Homework Solutions
#126646
Related Party Transactions: What disclosures are required in the financial statements
Most business transactions result from "arm's length' dealing. When parties to a transaction are related, the objectivity expected in unrelated bargaining may be lost. Any loss of objectivity may require reporting in the financial statements for users to be able to properly evaluate the company's financial condition and results of operations.
Consequently, material related party transactions must be disclosed. SFAS 57, Related Party Disclosures, identifies the requirements.
Required:
What information should be disclosed?
The disclosures required by SFAS No. 57 regarding transactions between the entity being audited and related parties are explained.
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