ACCA SBR Practice Exam 2025 – Complete Prep Guide

Question: 1 / 400

What information should be disclosed regarding related party relationships?

Personal identification of key management

All related party contracts

Name of the entity's parent and nature of the relationship

Disclosing the name of the entity's parent and the nature of the relationship with that parent is essential as it provides transparency regarding the governance structure and control over the entity. This information helps users of the financial statements understand who ultimately controls the entity and how that control can impact the entity's operations and financial position.

The disclosure enables stakeholders, including investors, creditors, and regulators, to assess risks associated with related party transactions, potential conflicts of interest, and the overall governance of the entity. Such transparency fosters trust and aids in compliance with regulatory frameworks that require detailed disclosures about related parties to inform decision-making processes.

While personal identification of key management, all related party contracts, and all revenue generated from related parties are also important disclosures, they do not provide the foundational context that the name of the entity's parent and the nature of the relationship does. Thus, option C is the most crucial and impactful information that should be disclosed regarding related party relationships.

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All revenue generated from related parties

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