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SFAS No.
6 Related
Party Disclosures |
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 Status |
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Issued by
the Financial Accounting Standards Committee in Taiwan
on
June 15, 1985 |
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Summary |
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The purpose of this Statement is to
establish the disclosure standards for an enterprise’ |
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s financial statements concerning
related party transactions. |
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Definition of Related Party |
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A party is related to an entity if one
party can exercise control or significant influence |
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over the operations or financing
policies of the other party. Entities under common |
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ownership or control are also deemed
related parties. |
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Definition of Related Party
Transaction
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A related party transaction is a
transfer of resources or obligations between related |
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parties, regardless of whether
monetary consideration is involved.
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Disclosure Standards |
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If there are significant transactions
between an enterprise and its related parties during
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the reporting period, the enterprise
should disclose the following information in the
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notes to the financial statements: |
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(a) the names
of the related parties;
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(b) the nature
of the relationship(s) involved;
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(c) the
following significant transactions between the enterprise and its
related parties,
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including price, payment period, |
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other related
information which helps to understand the impact of related party
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transactions on the financial statements:
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(i) |
the
dollar amount or percentage of purchases from related parties;
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(ii) |
the
dollar amount or percentage of sales to related parties; |
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(iii) |
the
dollar amount of property transactions and the resulting gains and
losses;
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(iv) |
the
ending balance or percentage of notes receivable and accounts
receivable; |
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(v) |
the
ending balance or percentage of notes payable and accounts payable; |
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(vi) |
the
highest outstanding balance, range of interest, ending balance and
the total
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interest amount in the reporting period; |
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(vii) |
the
ending balances of endorsed notes, guarantees or provision of
collateral;
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(viii) |
other transactions which have significant influence on
the current net income and
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financial position.
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Any one of the above related party
transactions which exceed 10% of the total amount
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of a specific transaction of an
enterprise should be disclosed separately; the remaining
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transactions may be presented in
aggregate.
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When preparing consolidated financial
statements, the enterprise need not disclose the
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eliminated related party transactions.
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Effective
date
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This statement becomes effective for financial
statements for the fiscal year ending on
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or after December 31, 1985. |
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