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FASB ASC Guide > FASB ASC 850

The Financial Accounting Standards Board (FASB) released the 800 section of the Accounting Standards Codification for the purpose of discussing broad topics. Accounting Standards Codification 850 (ASC 850) was released to address the more specific topic of related party transactions. When a company decides to do business with another company that is highly related in terms of ownership structure (for example, the CEO owns the shipping company) the shareholders should know – because of potential conflicts of interest that may occur. In the worst case scenario, the company may be paying too much for said shipping because the shipping company has an unfair advantage over the other competitors.

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