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26.3 Related party presentation matters
Publication date: 28 Feb 2022
us Financial statement presentation guide
S-X 4-08(k) requires reporting entities to identify material related party transactions on the face of the balance sheet, income statement, or statement of cash flows to draw attention to their existence. SEC guidance also specifically requires disclosure of receivables due from related parties, securities of related parties, and indebtedness of related parties on the face of the balance sheet.
In addition, certain US GAAP topics also require separate identification of material items on the face of the financial statements, including receivables (ASC 310), investments (ASC 323), payables (ASC 405), and equity (ASC 505).
For example, a reporting entity should separately identify amounts of revenue earned from or expenses incurred to a related party on the face of its income statement. ASC 850 also specifies that a reporting entity should separately identify accounts or notes receivable from officers, employees, or affiliated entities on its balance sheet and not include such items under a general heading such as accounts receivable or notes receivable.
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