A charity must identify who its related parties are and this will always include trustees, their close family members and any entities within a charitable group. Where there are transactions with related parties, it is important for the reader of the accounts to be able to understand why these transactions were in the best interests of the charity. If there have been no related party transactions, this fact must be stated. Otherwise, all charities must disclose:
- A description of the relationship between the parties and the transaction that occurred between them.
- The amounts involved including any balances at the reporting date and any amounts written off during the reporting period.
- Any terms and conditions between the parties to include security and guarantees.
- In addition, the Financial Reporting Standard 102 Statement of Recommended Practice requires the names of the related parties to be disclosed.