Related party disclosures The following diagram shows the corporate structure of Alpha Corporation and three other companies.

Alpha exercises control over both Beta’s and Delta’s policy decisions since it has majority voting rights and it appoints the majority of the directors of Beta and Delta. Kappa, a listed company, has a five-director board of which two directors are appointed by Alpha and the remaining three are appointed by another company, Omega, which owns 49% of the share capital. The remaining 21% of the share capital of Kappa are owned by the public.
One of the independent directors of Beta owns the entire share capital of another company, Phi Corporation, which has regular commercial dealings with Beta.

Required:
1. Discuss, from a risk reporting perspective, why it is important to disclose related party transactions.
2. Based on the information given, discuss the related party relationships that exist among the companies under IFRS 8 or IAS 24.

Transcribed Image Text:

Beta (80%) Alpha Corporation Delta (70%) Kappa (30%)