Section 3840 – Related Party Transactions

December 01, 2014

Section 3840 applies to:

  • Related party transactions in the financial statements of profit-oriented enterprises.

Section does not apply to:

  • Management compensation arrangements, including employee future benefits accounted for in accordance with Section 3462, Employee
  • Future Benefits, expense allowances and other similar payments, including loans and receivables, to individuals, in the normal course of business.
  • Transactions between an enterprise preparing non-consolidated financial statements and subsidiaries:
  • That are only controlled through means other than voting interests, potential voting interests, or a combination thereof, and
  • for which control is the only basis for the related party relationship. Transactions with such enterprises are governed by other Sections, such as Section 3280, Contractual Obligations.
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