Skip to content

CA Intermediate · Advanced Accounting · AS 18 Related Party Disclosures

During 2025-26, Vedant Pharma Ltd. had these dealings: (i) purchased goods Rs 25 lakh from Ojas Ltd., an associate; (ii) paid Rs 12 lakh as remuneration to Mr. Rao, a Key Management Personnel; (iii) paid Rs 5 lakh to Mr. Rao's brother, who is not a relative as defined by AS 18 and has no other link, for consulting; (iv) paid Rs 8 lakh to Mrs. Rao, Mr. Rao's wife, for rent of a building. Assume Mrs. Rao is a relative of KMP under AS 18 and the parties are related parties. What total amount of related party transactions is disclosable? (Treat a brother as not covered, as stated.)

The disclosable total is Rs 45 lakh: Rs 25 lakh with the associate, Rs 12 lakh to the key management person and Rs 8 lakh rent to his wife as a relative. The Rs 5 lakh paid to the brother is excluded because he is not a related party here.

  1. ARs 50 lakh
  2. BRs 45 lakhCorrect
  3. CRs 37 lakh
  4. DRs 25 lakh

Explanation

Disclosable items: associate purchase 25 + KMP remuneration 12 + rent to relative 8 = 45 lakh. The Rs 5 lakh to the brother is excluded as he is stated not to be a related party. Rs 50 lakh wrongly includes that payment. (Note: AS 18 exempts KMP remuneration disclosure from transaction-level reporting only where specified; here it is treated as a related party transaction as intended by the case.)

Did you get it right without looking?

One question tells you little. A timed set on AS 18 Related Party Disclosures shows your real accuracy, how long you take and where you lose marks.

Practise AS 18 Related Party DisclosuresFree diagnostic mock

More AS 18 Related Party Disclosures questions