In accordance with the "Basic Standards of Accounting Standards for Business Enterprises," the Ministry of Finance issued Accounting Standards for Business Enterprises No. 36—Related Party Disclosures on 2006/2/15, effective as of 2007/1/1.
1. Determination of Related Parties
Parties are related if one party controls, jointly controls, or exerts significant influence over the other, or if two or more parties are under common control, joint control, or significant influence from a single party.
Situations constituting related parties
- • Parent company and subsidiaries
- • Other enterprises under the same parent company as this enterprise
- • Investors that exercise joint control or significant influence over the enterprise
- • Joint ventures and associates of the enterprise
- • The enterprise's major individual investor and their close family members
- • Key management personnel of the enterprise or its parent company, and their close family members
II. Related Party Transactions
Related-party transactions refer to the transfer of resources, services, or obligations between related parties, regardless of whether a price is charged.
Common Transaction Types
- • Buy or sell goods and other assets
- • Provide or accept services
- • Guarantee or provide funding (loans or equity investments)
- • Leasing, Agency
- • Transfer of research and development projects
- • License agreement, compensation of key management personnel
III. Disclosure Requirements
- • Regardless of whether related-party transactions occur, enterprises shall disclose information about their parent and subsidiary companies in the notes, including names, nature of business, place of registration, and shareholding percentages.
- Related party transactions shall be disclosed separately by related party and transaction type.
- • Transaction details must include at least: transaction amount, unsettled item amounts and terms, pricing policies, etc.
Regulatory Document Attachment
Accounting Standards for Business Enterprises No. 36 — Disclosure of Related Party Relationships and Transactions (PDF)