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CA Final · Financial Reporting · Ind AS 24 Related Party Disclosures

Kaveri Pharma Ltd is a subsidiary of Sahyadri Holdings Ltd. A statute prohibits Kaveri from disclosing certain details of a transaction with a related party. The accountant asks how Ind AS 24 treats such disclosures. Which statement is consistent with the comparison with IAS 24 given in Appendix 1 of Ind AS 24?

Ind AS 24 does not require disclosures that conflict with confidentiality requirements of statute or regulations, because accounting standards cannot override legal or regulatory requirements. This is a carve-out that differs from IAS 24, so Kaveri need not disclose the prohibited details.

  1. ADisclosures that conflict with statutory or regulatory confidentiality requirements are not required, because accounting standards cannot override legal requirementsCorrect
  2. BThe disclosures must still be made in full because the standard overrides statute
  3. CThe disclosures must be made only in the auditor's report, not in the financial statements
  4. DThe disclosures are required but only if the transaction value exceeds the entity's materiality level

Explanation

Appendix 1 notes that Ind AS 24 (paragraphs 4A and 4B) exempts disclosures conflicting with confidentiality requirements of statute or regulations, since accounting standards cannot override legal or regulatory requirements. Option B reverses this position. The other options invent rules not in the standard.

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