Chapter 65 Related Party Transactions

Question 1

What are related parties

Answer 1

When one party is able to significantly influence or control the decisions of another aprty.

Question 2

What are the possible ways you can record a related party transaction

Answer 2

1. Carrying amount: amount item was recorded at BY THE TRANSFEROR (book value)
2. Exchange amount: amount paid or received by related parties (sales price). If a non monetary transaction, its the exchange value both parties agree to (does not have to be fair value)

Question 3

How are RPT’s measured at carrying amount?

Answer 3

When RPT’s are measured at carrying amount, any difference between carrying amounts of items exchanged is included as a charge to equity. Gains and losses are included as contributed surplus (gain credit, loss debit)

Question 4

How are RPT’s measured at exchange amount?

Answer 4

Gain or loss recognized in income for period (asset CANNOT be recorded more than FV.