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Why would the loan from Simon need to be disclosed under FRS1021A if he is not a director?
Re the director's salary issue, I've never considered £8424 salary for a full-time senior role, i.e. £4.05 per hour, to be "normal market conditions". But I guess in another few years it could well be...
under your paragraph 'Directors' loan'Why would you need to consider close family members of the directors' making the loan for a small company disclosure under Section 1A? My understanding is that for Sec 1A family members and companies under common control are not related party.
I was also going to raise this point. At the firm I work for there was initially a reluctance to not include connected companies or parties as related parties but the standard states as below.
1AC.35 Particulars must be given of material transactions the small entity has entered into that
have not been concluded under normal market conditions with:
(a) owners holding a participating interest in the small entity;
(b) companies in which the small entity itself has a participating interest; and
(c) the small entity’s directors [or members of its governing body].
So I believe transactions with connected parties, companies or otherwise, do not have to be disclosed under 1A. FRS 102 has the full connected party requirement we are all more familiar with, similar to FRSSE 15, but 1A appears to reduce the disclosure requirements, hence the difference between the full and small company standards.
What is everybody else doing?
(First time post btw, thanks.)
I was also going to raise this point. At the firm I work for there was initially a reluctance to not include connected companies or parties as related parties but the standard states as below.
1AC.35 Particulars must be given of material transactions the small entity has entered into that
have not been concluded under normal market conditions with:
(a) owners holding a participating interest in the small entity;
(b) companies in which the small entity itself has a participating interest; and
(c) the small entity’s directors [or members of its governing body].So I believe transactions with connected parties, companies or otherwise, do not have to be disclosed under 1A. FRS 102 has the full connected party requirement we are all more familiar with, similar to FRSSE 15, but 1A appears to reduce the disclosure requirements, hence the difference between the full and small company standards.
What is everybody else doing?
(First time post btw, thanks.)
Given that the related parties note ends up on public record at Companies House, I can't imagine any client will thank you for disclosing more than is necessary. why not just stick to what S1A requires? Also 'normal market conditions' is so nebulous that to my mind it sets the bar quite high such that you can argue most transactions are covered by it.
The trouble is how far do you go, do you have to include Directors remuneration, mileage driven, items on expenses claims, assets introduced and at what terms /cost (purchased or transferred) ..... and on it goes
Accountants and auditors "go to" response when they can't be bothered with something is to say "it isn't material".
I really do not understand the comment that the "balance" (of a director's remuneration) can be paid by way of a dividend. It is something that is said all too often.
Dividends are paid to shareholders. If paid as remuneration for services, the courts have held that such would be remuneration (and chargeable to tax and NIC under PAYE).
Would you also need to consider disclosing directors dividends (if significant/material) in order for the accounts to show a 'true & fair' view?
That would presumably override the argument on whether it was at market rates?