What it is
ASC 850 requires disclosure of the nature of the relationship, a description of the transactions, the dollar amounts for each period and the amounts due to or from related parties with their terms. Control relationships are disclosed even when there are no transactions. Representing that transactions were at arm’s length requires support.
The checklist links the disclosure to AU-C 550 audit work: completeness of the list of related parties, significant unusual transactions and management’s representation.
When to use it
- When drafting the related party note.
- To close out the related party audit work against the note.
- For owner-managed businesses with owner loans, leases and shared costs.
What’s inside
- Identification and completeness of related parties
- Nature, amounts and balances
- Arm’s-length statements, tax sharing and presentation
- Audit linkage and representations
Standard cited
This template follows ASC 850 / AU-C 550. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use. See AU-C 550 explained.
Questions
What transactions are excluded?
Compensation arrangements, expense allowances and similar items in the ordinary course of business are excluded from ASC 850. Transactions eliminated in consolidated or combined statements need no disclosure.
Can the note say the terms were arm’s length?
Only if the entity can substantiate the statement. Otherwise omit it. ASC 850 allows disclosure of the terms without a claim about equivalence.
Is this checklist complete?
No. It is a prompt list paraphrased from the standard, not a substitute for the Codification or a full commercial disclosure checklist. Check each item against the current ASC text and any ASUs issued since the date you last checked, and add industry-specific requirements.
Related templates
- Related Party Questionnaire for Management (AU-C 550 / ASC 850)
- GAAP Disclosure Checklist (Private Company, Short Form)
- Disclosure Checklist: Leases (ASC 842), Lessee and Lessor
Last updated 11/05/2026. All free templates.