What information might 'Notes to the Financial Statements' include regarding related party transactions?

'Notes to the Financial Statements' provide essential context and details that enhance the understanding of the financial statements. When it comes to related party transactions, one crucial aspect is a description of the parties involved. This information is vital because it outlines who the related parties are, which can include individuals or entities that have a close relationship with the reporting entity, such as family members of key management personnel or entities controlled by those individuals.

This transparency helps stakeholders assess the nature and potential risks of these transactions, as related party transactions can sometimes lead to conflicts of interest or less favorable terms compared to transactions conducted at arm's length. The description of these parties ensures that users of the financial statements are aware of any potential biases or influences that may affect financial reporting.

While information such as profit margins, plans for future transactions, or just the financial impact on sales could provide additional context, the fundamental requirement is to identify the parties involved. This forms the basis for understanding the nature of the transactions and their potential implications for the business's financial health and integrity.