How to determine who are Key Management Personnel (KMP)
Definition of KMP
KMP has the same meaning as defined in AASB 124 Related Party Disclosures
Consistent with this definition, the board of directors of Commonwealth companies are considered to be KMP.
Common examples of other KMP determined by Commonwealth companies in preparing their financial statements in accordance with AASB 124 may include, but is not limited to the following:
There should be consistency in the reporting of KMP remuneration between the financial statements and the information reported in the body of the annual report.
What to report under KMP executive remuneration
The Digital Annual Reporting Tool reporting table for KMP is prepopulated with the information above in the format required by the KMP table in Schedule 3 of the PGPA Rule. Commonwealth companies should complete the data templates with the Digital Annual Reporting Tool to ensure that the correct information is being reported. Please refer to How to calculate & report for further details on this and general requirements on each remuneration category.
Reported KMP remuneration to be consistent with financial statements
Under AASB 124, reporting companies are already required to disclose in the notes to the financial statements total remuneration of the KMP at the aggregate level, including how it is split between the following four major categories:
- short-term employee benefits,
- post-employment benefits,
- other long-term employee benefits, and
- termination benefits.
The key difference between what is reported in the notes to the financial statements, and what is required under the PGPA Rule for KMP is the level of detail. The financial statement disclosure is on an aggregated basis, whereas the annual report KMP disclosure is required to be on an individual basis. Additional information that must be included in the KMP table includes the:
- full name of each KMP, and
- position of the KMP, for example, Board member or Chief Executive Officer.
The total remuneration disclosed in accordance with the PGPA Rule should match the total remuneration disclosed in the notes to the financial statements.
Where the composition of a company’s KMP changes from that disclosed in the previous reporting period, it is good practice to include a note to the KMP table to explain the variation.