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RELATED PARTY TRANSACTIONS AND DIVIDENDS

This old chestnut again. The scenario is, two husband and wives couples, only the husbands of which are the directors of a company. Are the dividends paid to the wives disclosed with the husbands dividends as connected persons? The shareholdings are equal ie 25% each. I expect so, but cannot find clear reference to it.

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By MBK
25th Sep 2017 12:53

In most cases there is a case to be made for disclosing neither.

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25th Sep 2017 13:59

For FRS 102 1A - no disclosure of divs required at all.

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By Ammie
25th Sep 2017 14:07

Thank you for the replies.

For a micro I understand no disclosure required, but this is a small company.

I will refer back to the FRS.

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to Ammie
25th Sep 2017 15:55

FRS 102A is not about micro companies (that's FRS 105). It's about small companies.

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By Ammie
to johngroganjga
25th Sep 2017 16:36

Thanks John.
I have re-read the relevant section and I now can see that no quantification is necessary. There just seem inconsistencies in the interpretation given by various publications. It appears not mandatory but is an encouraged disclosure.

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to Ammie
25th Sep 2017 20:57

'Encouraged disclosure'

I've never come across a client who makes 'encouraged disclosure'.

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By Ammie
25th Sep 2017 22:09

Nor have I!! It's just the writers of this stuff, most of which is of little significance to the private company. Keeps them busy!!

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By mrme89
25th Sep 2017 22:48

Academics don’t have a clue, do they?

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to mrme89
26th Sep 2017 09:01

I recall at University a *ahem* *ahem* years ago.... We had a lecturer who had never been in an accountancy job, but had spent his life in academia, teaching about auditing.

He used to bang on about the various threats to auditors independence, listing each one and the ways to mitigate it.

The reality being of course, there is only one threat to independence - fees - and there is no way to mitigate it and no way to avoid the fact that auditors are NOT independent of their clients.

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to thevaliant
26th Sep 2017 10:35

thevaliant wrote:

The reality being of course, there is only one threat to independence - fees - and there is no way to mitigate it and no way to avoid the fact that auditors are NOT independent of their clients.

This is very much the elephant in the room. They go on about threats from familiarity, undue hospitality and so on which are trifling in comparison. The reality is that the directors appoint the auditors and so it is no better than having the defendant hiring the judge and jury.

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By Ammie
25th Sep 2017 22:59

Most are detached from reality in artificially created jobs! Such in depth technicality is an ever increasing spiral of irrelevance to the many.

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