a) Discuss the related party disclosures required in the financial statements of Terrier plc only.b) Explain why such disclosures are important to the user of financial statements IAS 24 Related Party Disclosures requires adequate disclosure in the financialstatements of transactions between the entity and individuals/ businesses to whom itis related.i) Mr Bulldog owns all of the issued share capital of Terrier plc. During the year MrBulldog purchased goods and services from Terrier at normal market terms.Payment for the goods was made in full before the year-end.ii) Terrier plc owns 30% of the shares in a bank, Pinscher plc. At the end of the yearPinscher loaned £2 million to Terrier. The loan is for 2 years and is interest-free.iii) Mr Bulldog's wife, Mrs Bulldog, is a senior director of Ridgeback Ltd. During theyear Ridgeback sold goods to Terrier. The transaction was at a 50% discount.The balance is still outstanding at the year end.

Here discuss about the details of the related party information which are involved with the…

Answered: a) Discuss the related party…

a) Discuss the related party disclosures required in the financial statements of Terrier plc only. b) Explain why such disclosures are important to the user of financial statements

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

a) Discuss the related party disclosures required in the financial statements of Terrier plc only.

b) Explain why such disclosures are important to the user of financial statements

IAS 24 Related Party Disclosures requires adequate disclosure in the financial
statements of transactions between the entity and individuals/ businesses to whom it
is related.
i) Mr Bulldog owns all of the issued share capital of Terrier plc. During the year Mr
Bulldog purchased goods and services from Terrier at normal market terms.
Payment for the goods was made in full before the year-end.
ii) Terrier plc owns 30% of the shares in a bank, Pinscher plc. At the end of the year
Pinscher loaned £2 million to Terrier. The loan is for 2 years and is interest-free.
iii) Mr Bulldog's wife, Mrs Bulldog, is a senior director of Ridgeback Ltd. During the
year Ridgeback sold goods to Terrier. The transaction was at a 50% discount.
The balance is still outstanding at the year end.

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