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

Konkan Ports Ltd is controlled by Arya Holdings Ltd. Konkan had no transactions with Arya during the year. The accountant says no disclosure about Arya is needed. Which is the correct approach under the rationale given in Ind AS 24 as modified in India?

Konkan should disclose the relationship with Arya even though there were no transactions. Paragraph 14 of Ind AS 24 explains the rationale for disclosing a related party relationship where control exists, so disclosure does not depend on transactions occurring.

  1. ARelationship should still be disclosed, because paragraph 14 explains that the related party relationship where control exists is disclosed irrespective of transactionsCorrect
  2. BNo disclosure is needed because there were no transactions
  3. CDisclose only if the balance outstanding exceeds a threshold
  4. DDisclose only in the auditor's report

Explanation

Paragraph 14 was modified to explain the rationale for disclosing a related party relationship when control exists. The control relationship is therefore disclosed even without transactions, so the accountant's view is wrong.

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