IAS 24 - Related Party Disclosures is an International Accounting Standard issued by the IASB that outlines the requirements for identifying, disclosing, and reporting related party relationships and transactions in financial statements. A related party is any individual or entity that has control, joint control, or significant influence over the reporting entity, or is under common control with the reporting entity. This includes subsidiaries, associates, joint ventures, key management personnel, and close family members of these individuals.

The purpose of IAS 24 is to ensure transparency and provide information necessary for users of financial statements to understand how an entity’s financial position and profit or loss may be affected by its relationships and transactions with related parties. For example, if a company provides a significant loan to a related party at favorable terms, IAS 24 requires disclosure of the terms of the loan, the amounts involved, and the nature of the relationship.

By adhering to IAS 24, companies provide stakeholders with a complete and clear picture of potential conflicts of interest and how they are managed, enhancing trust and accountability. Without such disclosures, users of financial statements may not be able to accurately assess the risks and financial performance of the entity.