Operations between an entity issuing financial statements and other persons or entities are carried out by free agreement between the parties, under conditions of independence between them, based on the policies established by the administration.
related-parties-financial-information-standard-c-13On occasions, these operations are carried out with entities considered related parties in which, due to various circumstances, there is control, significant influence, kinship or other types of situations that affect the conditions of the operations carried out.
a) Reporting entity - is the issuing entity of the financial statements.
b) Related party - is any natural person or entity, other than the reporting entity, that:
i) directly or indirectly through one or more intermediaries:
- controls, is controlled by, or is under common control of, the reporting entity, such as: controlling entities, subsidiaries and affiliates, as well as natural persons, partners or shareholders, members of the board of directors and key management personnel or relevant executives of the reporting entity.
Example 1 - Direct control
Shareholding of Compañía example, SA de CV
Example 2 - Indirect control (A and SA1, SA2 and SA3)
Shareholding Company Example 2, SA de CV
- Exerts significant influence over, is significantly influenced by, or is under common significant influence of, the reporting entity, such as: holding entities of associates, associates and affiliates, as well as natural persons, partners or shareholders, members of the board of directors and staff key manager or relevant officers of the reporting entity.
ii) it is a joint venture in which the reporting entity participates.
iii) is a close relative of any of the persons in subsection (i)
iv) is an entity over which any of the persons in subsections (i) and (iii) exercises significant control or influence.
v) It is a fund derived from a compensation plan
for employee benefits, either of the reporting entity itself or of another that is a related party of the reporting entity.
c) Operations between related parties - is any transfer of resources, services or obligations made between the reporting entity and a related party regardless of whether or not there is a price or consideration.
d) Close relative - (i) The children and the spouse, the common-law wife or common-law partner; (ii) the children of the spouse, the concubine or the common-law partner; (iii) Dependent persons of the family member or their spouse, common-law or common-law wife; and (iv) any other person for whom the law specifies that the entity must present information on related parties.
e) Key management personnel or relevant directors - is any person who has the authority and responsibility to plan and direct, directly or indirectly, the activities of the reporting entity.
f) Control - is the power to govern the operating and financial policies of an entity, in order to obtain benefits.
g) Significant influence - is the power to participate in deciding the operating and financial policies of the entity in which an investment is made, but without having the power of government over said policies.
h) Joint venture - contractual agreement by which two or more entities participate in an economic activity over which they have significant influence.
1. Description of the operations carried out with PR, such as:
- Purchases and sales of inventories Purchases and sales of properties and other assets Provision and receipt of services Transfers of resources derived from financing agreements: loans and capital contributions, whether in cash or in kind Guarantees and guarantees, granted and Received Assignment and absorption of debt The amount of irrecoverable items with related parties.
2. The amount of the operations, of the outstanding balances of CxC and CxP with PR, as well as terms and conditions.
3. The information of the previous operations will be grouped:
- Controlling Entities that exercise significant influence Subsidiaries Associated Affiliates Joint ventures, of which the entity is part Key management personnel or relevant executives; and Other related parties.
4. When consolidated financial statements are presented, the transactions and balances with related parties that are eliminated in the consolidation process should not be disclosed.
5. The reporting entity must disclose the total amount of employee benefits granted to key management personnel or relevant directors of the entity, grouped into: a) short-term and long-term direct benefits; b) share-based payments; c) termination benefits and post-retirement benefits.
6. It is required to reveal that the conditions of the consideration are equivalent to those of market operations, only if it has sufficient elements to demonstrate it.
