Accounting, Reporting & Tax
Related-party Transactions in Shipping
Summary
Related-party transactions include business with owners, managers, affiliates and entities linked by control or significant influence.
Why this matters in ship finance
Above- or below-market management fees, charters and guarantees can affect profit quality and creditor recoveries.
The concept
IAS 24 governs related-party disclosures in in-scope IFRS accounts; company-law and listed-company rules may impose additional approval and transparency requirements.
How it is used in practice
Reconcile beneficial ownership, intercompany loans, vessel sales, management agreements, guarantees and remuneration, including arm’s-length analysis.
Practical issues
Full disclosure is not proof that a transaction is arm’s length. Accounting related-party definitions differ from some tax or AML definitions.
How ShipFinance.ai uses this concept
Provide a counterparty network and related-party disclosure review for credit analysts.
Key takeaways
- Disclose in-scope related-party relationships and transactions.
- Accounting, tax and AML definitions may differ.
- Disclosure does not prove arm’s-length pricing.