The FASB define related parties as
A)customers of the company
B)investments accounted for using the equity method of accounting for investment securities
C)trusts for the benefit of employees,such as,pension and profit sharing trusts that are managed by union representatives
D)principal debtors of the company and their immediate families
E)management of the company and their immediate families
F)both A and C
G)both B and E
H)both D and E

Question

Quizplus · Accepted Answer

The Financial Accounting Standards Board (FASB) defines related parties to include entities and people with a significant relationship to the reporting entity. This includes management and their immediate families (E) and entities where the reporting entity has significant influence, which is often operationalized through the use of the equity method of accounting for investment securities (B). Hence, both B and E are considered related parties according to FASB standards.

The FASB Define Related Parties as