ACCA Strategic Business Reporting (SBR) Practice Exam 2025 - Free ACCA SBR Practice Questions and Study Guide

The term ‘related party’ in the context of joint ventures refers primarily to entities that are controlled by a third party. This definition is crucial because it encompasses various relationships that may exist between parties involved in a joint venture, particularly when control is exerted by a mutual third party.

In the context of joint ventures, understanding related parties is significant for financial reporting and disclosure purposes. The International Financial Reporting Standards (IFRS) require that transactions between related parties be disclosed, even if they occur at arm's length, because they can affect the financial position and performance of the entities involved.

Entities controlled by a third party can establish connections that influence business decisions and financial outcomes, highlighting the need for transparency in any such arrangements. Knowing who counts as a related party helps in assessing potential implications on financial statements and understanding the context of business operations.

The other choices refer to competitive relationships, which do not carry the same implication of control or influence that characterizes related parties in joint ventures.