IND AS 24 Related Party Disclosures

IND AS 24 shall be applied in:

 Identifying related party relationships and transactions;

 Identifying outstanding balances, including commitments, between an entity and its related parties;

 identifying the circumstances in which disclosure of the items above is required; and

 Determining the disclosures to be made about those items.

 

IND AS 24 requires disclosure of:

 Related party relationships

 Related party transactions

 Outstanding balances with related parties

 Commitments to related parties.

 

The disclosures have to be made in the related consolidated and separate financial statements of:

 A parent

 Investors with joint control of an investee

 Investor with significant influence over an investee.

 

SCOPE

Key management personnel

Those persons having authority and responsibility for:

 Planning, directing, and controlling the activities of the entity, directly or indirectly, including all directors (executive and non-executive).

 

Close family member

Includes, but is not limited to:

 Children and Dependents

 Spouse/Partner

 Children and Dependents of Spouse/Partner.

 Brother Sister, father and mother

 

Need to assess the level of influence on a case-by-case basis.

 

Related party transaction

Transfer of the following between related parties:

 Resources

 Services

 Obligations between related parties, whether a price is charged or not.

 Management Contracts including for deputation of employees.

 

DISCLOSURE

Relationships between parents and subsidiaries

 Regardless of whether there have been transactions, disclosure of the name of the parent or ultimate controlling party (if different) is required.

 

If parent or ultimate controlling party did not prepare consolidated financial statements for public use, the name of the next senior parent that does so needs to be disclosed as well.

Key management personnel compensation

Disclose in total for the following categories:

 Short-term employee benefits

 Post-employment benefits

 Other long-term benefits

 Termination benefits

 Share-based payments.

 

Management entities

 If an entity obtains key management personnel services from a management entity the requirements of IND AS 24, to analyse compensation into short term, post-employment, other long term and termination benefits, and share-based payments, do not have to be applied to the compensation paid by the management entity to the management entity’s employees or directors.

 Instead, the entity has to disclose the amount incurred for the service fee paid to the management entity.

 

IND AS 24 shall be applied in:

 Identifying related party relationships and transactions;

 Identifying outstanding balances, including commitments, between an entity and its related parties;

 identifying the circumstances in which disclosure of the items above is required; and

 Determining the disclosures to be made about those items.

 

IND AS 24 requires disclosure of:

 Related party relationships

 Related party transactions

 Outstanding balances with related parties

 Commitments to related parties.

 

The disclosures have to be made in the related consolidated and separate financial statements of:

 A parent

 Investors with joint control of an investee

 Investor with significant influence over an investee.

 

Related party transactions

Only if there have been transactions, disclose:

 The nature of related party relationship

 Information about transactions

 Information about outstanding balances to understand the potential effect on the Annual Financial Statements

 Information about provision for doubtful debts as well as bad and doubtful debt expenses with related parties.

 

Disclose related party transactions for each category of related parties.

The above disclosures shall be presented separately for each of the following categories:

 The parent

 Entities with joint control of, or significant influence over, the entity

 Subsidiaries

 Associates

 Joint ventures in which the entity is a joint venturer

 Key management personnel of the entity or its parent

 Other related parties.

 

Disclosures which conflict with confidentiality requirements of statute/ regulations are not required to be made since Accounting Standards cannot override legal/regulatory requirements.