A related party transaction may be on terms that are beneficial to the charity, or they may be on normal terms, known as arm’s length transactions. Such transactions may still require disclosure. Transactions involving trivial amounts do not have to be disclosed, but material transactions do have to be disclosed.
Donations from related parties may make donations to the charity. These donations may or may not have conditions attached to them that require the charity to alter significantly the nature of its activities. Conditions that make the donation a transaction that must be disclosed include requiring the charity to purchase goods or services from a specified supplier; making an interest bearing loan to the charity; or requiring that payments be made to a specified third party.
Donations with no conditions attached do not require individual disclosure in the financial statements. However, The Charities Statement of Recommended Practice 2015 requires the charity to provide disclosure of the aggregate amount of donations received without conditions from related parties.