SFRS(I) 1-24 requires disclosure of related party relationships, transactions, and outstanding balances (including commitments) in an entity's financial statements. Related party relationships — a parent, subsidiaries, associates, key management personnel, and so on — can affect an entity's financial position and results, and transactions with related parties may not occur on the same terms as with independent parties. The standard requires that they, and the relationships behind them, be disclosed so users can understand their potential effect. It is the Singapore equivalent of IAS 24 under IFRS and Ind AS 24 in India.
Objective and scope
The objective is to ensure that an entity's financial statements contain the disclosures necessary to draw attention to the possibility that its financial position and profit or loss may have been affected by the existence of related parties and by transactions and outstanding balances (including commitments) with them. The standard requires disclosure; it does not deal with the recognition or measurement of related party transactions. It applies to individual and consolidated financial statements.
Who is a related party
A related party is a person or entity that is related to the entity preparing its financial statements (the reporting entity). The standard defines this in two parts.
A person or a close member of that person's family is related to the reporting entity if that person has control or joint control of the reporting entity, has significant influence over it, or is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.
An entity is related to the reporting entity if any of a number of conditions apply — for example, the entity and the reporting entity are members of the same group (parent, subsidiary, fellow subsidiary); one is an associate or joint venture of the other; both are joint ventures of the same third party; the entity is a post-employment benefit plan for employees of either the reporting entity or a related entity; the entity is controlled or jointly controlled by a person identified above; or a person with control/joint control over the reporting entity has significant influence over the entity or is a member of its key management personnel.
Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person — including that person's children and spouse or domestic partner, children of the spouse or domestic partner, and dependants of the person or their spouse or domestic partner. Key management personnel (KMP) are those persons having authority and responsibility for planning, directing, and controlling the activities of the entity, directly or indirectly, including any director.
What must be disclosed
Relationships involving control. Relationships between a parent and its subsidiaries are disclosed irrespective of whether there have been transactions between them. An entity discloses the name of its parent and, if different, the ultimate controlling party.
Key management personnel compensation. An entity discloses KMP compensation in total and analysed by category: short-term employee benefits, post-employment benefits, other long-term benefits, termination benefits, and share-based payment. This category-by-category breakdown is a specific requirement of the standard.
Related party transactions. If there have been transactions between related parties, the entity discloses the nature of the related party relationship as well as information about the transactions and outstanding balances (including commitments) necessary for users to understand the potential effect on the financial statements. At a minimum this includes the amount of the transactions; the amount of outstanding balances (including commitments), their terms and conditions (including whether secured) and details of any guarantees; provisions for doubtful debts related to those balances; and the expense recognised in respect of bad or doubtful debts due from related parties. These disclosures are made separately for each category of related party.
The Singapore context
For Singapore companies, related party disclosures under SFRS(I) 1-24 operate alongside the Singapore Companies Act and, for listed entities, the SGX listing rules, which contain their own requirements on interested person transactions (IPTs) — transactions between a listed issuer (or its subsidiaries) and interested persons. The SGX IPT regime is a separate, additional disclosure and approval framework: an entity may need to comply both with the accounting disclosures under SFRS(I) 1-24 and with the SGX rules on interested person transactions, which use their own definitions and thresholds. The two overlap but are not identical, and both should be considered.
A brief illustration
A Singapore company is 60% owned by a parent, pays management fees to the parent, buys materials from a fellow subsidiary, and pays remuneration to its key management personnel. Under SFRS(I) 1-24, it discloses its parent and ultimate controlling party (regardless of transactions), discloses KMP compensation split into short-term benefits, post-employment benefits, other long-term benefits, termination benefits, and share-based payment, and discloses the nature and amounts of the transactions with the parent and fellow subsidiary along with outstanding balances, their terms, and any related doubtful-debt provisions — separately for each category of related party. If the company is SGX-listed, it separately assesses whether any of these transactions are interested person transactions requiring disclosure or approval under the listing rules.
How SFRS(I) 1-24 relates to IFRS and Ind AS
SFRS(I) 1-24 is identical to IAS 24 under IFRS, and therefore very closely aligned with Ind AS 24 in India — the same definition of related parties, the same requirement to disclose controlling relationships even absent transactions, the same KMP compensation breakdown, and the same government-related-entity relief. Because both Singapore and India converge to the IFRS text, the accounting disclosures are materially the same across the three frameworks. For anyone coming from India's older AS framework, note that AS 18 does not require KMP compensation to be broken down by category and has a somewhat narrower definition of related parties.
Common pitfalls
Recurring issues include failing to disclose the parent and ultimate controlling party where there were no transactions; not breaking down KMP compensation by the required categories; overlooking related parties such as close family members of KMP or post-employment benefit plans; and, for listed entities, conflating the SFRS(I) 1-24 disclosures with the separate SGX interested-person-transaction requirements.
Why this is cleaner on a unified system
Identifying and disclosing related party transactions requires being able to flag and total transactions with the relevant parties across the entity — far easier when all transactions are captured in one connected system where counterparties can be tagged consistently. When the ledger holds a single source of truth with related parties identified, and where KMP compensation flows through the same payroll and accounting system, extracting transaction amounts, outstanding balances, and the categorised KMP compensation for disclosure is more straightforward than searching across separate tools.
This article is a detailed educational summary of SFRS(I) 1-24 in plain language. It is not a substitute for the full text of the standard. Accounting standards are amended from time to time; always verify the current, authoritative text of SFRS(I) 1-24 as issued by the Singapore Accounting Standards Council before relying on it, and consult a qualified professional accountant for application to your specific circumstances.