Related Party Disclosures & Subsequent Events Nick Piumelli & Kelly Culp ACTG /1/2015

Related Party Disclosures

Who is a related party? IAS 24  Family members  Joint venture in which the entity is a partner  The party is an associate of the entity  Post-employment benefit entities  Management of the entity  An entity that is controlled, jointly controlled, or significantly influenced ASC 850  Parent and its subsidiaries  Investments that are accounted under the equity method  Subsidiaries of a common parent  Post-employment benefit entities  Principal owners, management, and family members  Affiliates

Disclosure Requirements IAS 24  The name of the parent or "ultimate controlling entity"  Compensation  Employee benefits  Post-employment benefits (life insurance, pensions, 401(k)'s)  Share based compensation plans  Amount of transactions, and any outstanding balances  Every related party must disclose the above ASC 850  Nature of the relationship  Description of all transactions for each period that statements are presented  Amounts due from or to related parties at the balance sheet date  Must adhere to information in paragraph  Aggregate amount of current and deferred tax expense and amount of tax-related balances due to or from affiliates  Methods used to allocate current and deferred tax expenses to members of the group

Subsequent Events

Subsequent Events Period US GAAP  The subsequent events periods begins immediately after the balance sheet date and runs through the date the statements are issued.  For non-SEC filers, the period runs through the date the statements are available to be issued. SEC filers do not need to disclose the date of issuance, but non-SEC filers do. IFRS  The subsequent events periods begins immediately after the balance sheet date and runs through the date the statements are authorized for issue, which is before the filing date. The authorization date must be disclosed.

Type I Events  US GAAP/IFRS  A Type I event provides evidence about conditions at or before the balance sheet date. It typically requires an adjustment to the financial statements.

Type II Events: Going Concern US GAAP  Management is not required to assess the entity’s ability to continue as a going concern. Auditors assess its ability to continue one year from the financial statement date. If there is substantial doubt, they must disclose this information. IFRS  Management makes this assessment, and the time period is not limited to one year. If they cannot continue as a going concern, they must adjust the financial statements.  Type II events are events that occur entirely after the balance sheet date.

Type II Events: Short-Term Loans US GAAP  If management intends to refinance short-term loans on a long-term basis, and they can demonstrate the ability to do so before issuing the financial statements, the loans are classified as long-term. IFRS  Short-term loans are not reclassified as long-term if they are refinanced after the balance sheet date.

Type II Events: Debt Covenant Violations US GAAP  If a debt covenant violation is fixed before the issuance of the financial statements, the debt can remain long-term. IFRS  A debt covenant violation must be fixed before year-end for the debt to remain long-term.

Type II Events: Stock Dividends & Stock Splits US GAAP  Financial statements must be adjusted for stock dividends and splits declared after year end. IFRS  Financial statements are not adjusted for this reason.

Convergence  On December 1, 2010, the FASB declared that they would require management to reassess the entity’s ability to meet its obligations if a significant subsequent event occurs before the issue date. This has not yet been implemented.

Any Questions?

Works Cited  FASB (Financial Accounting Standards Board). (n.d.). ASC Retrieved September 30, 2015 from FASB Accounting Standards Codification. Database.  FASB (Financial Accounting Standards Board). (n.d.). ASC Retrieved September 30, 2015 from FASB Accounting Standards Codification. Database.  Wiecek and Young. “Related Party Disclosures: IAS 24, IFRS Primer, Chapter 26.” PowerPoint Presentation.