According to IAS 24 Related Party Disclosures, a related party relationship exists between the reporting entity (the XY group) and close family members of its key management personnel (KMP). A director of a subsidiary (AB) is considered KMP for the purposes of the group's consolidated financial statements. A spouse is defined as a close family member. Therefore, the spouse of a Director of AB is a related party of the XY group. Any transaction between a member of the group (XY) and this related party must be disclosed. The fact that the transaction was at market value is irrelevant to the disclosure requirement itself, although it would form part of the disclosure details.

A. A major customer is not defined as a related party under IAS 24 simply because of the significance of its transactions with the entity.

C. This transaction is likely disclosable, but the related party status depends on the rebuttable presumption that a directorship confers significant influence (IAS 28), making it less definitive than option B.

D. Two entities are not considered related parties merely because they are both associates of the same investor ('fellow associates').

1. International Accounting Standards Board (IASB). (2011). International Accounting Standard 24: Related Party Disclosures. IFRS Foundation. Paragraph 9

Definitions of "Related party" (specifically (a)(i) and (b)(iv)

(v))

"Key management personnel

" and "Close members of the family of a person."

2. IFRS Foundation. (2012

March). IFRS Interpretations Committee Update. Agenda Paper 12: IAS 24—Identification of related parties by a parent entity. This paper clarifies that key management personnel of a subsidiary are considered related parties of the reporting entity (the group) in its consolidated financial statements.

3. International Accounting Standards Board (IASB). (2011). International Accounting Standard 28: Investments in Associates and Joint Ventures. IFRS Foundation. Paragraph 6(a)

which lists "representation on the board of directors or equivalent governing body of the investee" as evidence of significant influence.