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ACCA Strategic Professional · Strategic Business Reporting (International) · Presentation and disclosure in financial statements

Zeta Ltd pays its directors and the chief operating officer, who are its key management personnel, the following during the year: short-term salaries and benefits $2.4 million, post-employment pension contributions $0.5 million, and share-based payments $0.3 million. The CEO's close family member also received a $0.1 million consultancy fee from Zeta. Which statement about IAS 24 disclosure is correct?

IAS 24 requires key management compensation in total and analysed by category such as short-term, post-employment and share-based payment. The consultancy fee paid to the CEO's close family member is a separate related party transaction and is disclosed separately.

  1. AKey management compensation must be disclosed in total and analysed by category, including short-term benefits, post-employment benefits and share-based payment, while the consultancy fee is disclosed separately as a related party transactionCorrect
  2. BOnly total compensation of $3.2 million is required, with no categories
  3. CCompensation is disclosed only if it exceeds normal market rates
  4. DThe consultancy fee is included within key management compensation of $3.3 million

Explanation

IAS 24 requires key management personnel compensation in total and for each category (short-term, post-employment, other long-term, termination, share-based payment). Fees to a close family member are a related party transaction, not compensation of key management, so they are disclosed separately. Option D wrongly merges them.

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