In financial and business decisions, if there is a direct or indirect control relationship, one party can have a significant impact on the other party's financial and business decisions, or both parties are controlled by the same controller, these related parties are called related parties.
The existence of related parties may affect the fairness and transparency of transactions. In the case of related parties, the transaction may not be conducted in a fair and just manner, because the decision between related parties may be controlled or greatly influenced. In addition, transactions between related parties may also affect the company's financial position and operating results.
In the financial report, it is necessary to disclose the information of related parties so that investors and other stakeholders can understand the transactions and relationships between the company and related parties. This information includes name, domicile, business scope, transaction amount with the company, etc. In addition, if the related party has a controlling relationship, it is also necessary to disclose the information of the controlled party.
For investors, it is very important to understand the existence of related parties and their influence on the company's financial and business decisions. By understanding related parties and their transactions, investors can better evaluate the company's financial situation and operating results and make more informed investment decisions.
Related party form:
1. Parent-subsidiary relationship: the parent company exerts great influence or control on its subsidiaries through direct or indirect control, thus forming the parent-subsidiary relationship. In this relationship, the parent company can control or exert great influence on the decision-making of the subsidiary, thus affecting the financial and operating conditions of the subsidiary.
2. Enterprise relationship under the same controller: In this case, two or more enterprises are controlled or greatly influenced by the same controller, thus forming a related party relationship. There may be transactions and capital exchanges between these enterprises, which may affect the financial status and operating results of the enterprises.
3. Relationship between joint ventures and associated enterprises: Joint ventures and associated enterprises are enterprises in which investors hold more than a certain proportion of the equity of the invested enterprise, thus affecting the business decision of the invested enterprise. Because investors hold more than a certain proportion of the equity of the invested enterprise, there is a related party relationship between the invested enterprise and investors.
4. Family relationship: Family relationship refers to the relationship formed between individuals or families with blood relationship. In a family business, family members often have great influence or control over the business, thus forming a related party relationship.