What constitutes a related party transaction?

A related party transaction is characterized by a transfer of resources, services, or obligations between entities that are related, regardless of the pricing mechanism involved. This definition encompasses a wide range of interactions, including financial transactions, sales, leases, or the provision of services. The key aspect is the relationship between the parties involved, which could include parent companies, subsidiaries, joint ventures, or even individuals in key positions within the entities.

By focusing on the relationship rather than the transaction's pricing, this definition captures the essential nature of related party transactions, which often carry a higher risk of conflict of interest or terms that may not reflect true market conditions.

In contrast, the other options define transactions that may not necessarily establish a related party connection, or they imply specific conditions (like market pricing or secured loans) that do not align with the broad definition of related party transactions. Hence, option B accurately encapsulates the essence of related party transactions by emphasizing the relationship rather than the commercial terms of the transaction.