Reference no: EM132985045

Problem 1: Discuss whether the following events would require disclosure in the financial statements of the RP Group, a public limited company, under IAS 24.

The RP Group, merchant bankers, has a number of subsidiaries, associates and joint ventures in its group structure. During the financial year to 31 October 20X9 the following events occurred.

(i) The company agreed to finance a management buyout of a group company, AB, a limited company.In addition to providing loan finance, the company has retained a 25% equity holding in the company and has a main board director on the board of AB. RP received management fees, interest payments and dividends from AB.

(ii) On 1 July 20X9, RP sold a wholly owned subsidiary, X, a limited company, to Z, apublic limited company. During the year RP supplied X with secondhand office equipment and X leased its factory from RP. The transactions were all contracted for at market rates

(iii) The retirement benefit scheme of the group is managed by another merchant bank. An investment manager of the group retirement benefit scheme is also a non-executive director of the RP Group and received an annual fee for his services of Shs 25m which is not material in the group context.The company pays Shs 160m per annum into the scheme and occasionally transfers assets into the scheme. In 20X9, property, plant and equipment of Shs 100m were transferred into the scheme and a recharge of administrative costs of Shs 30m was made.