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

Meridian Components Ltd. has a statute-based confidentiality requirement that prohibits it from naming a particular government-owned counterparty in its financial statements. Under Ind AS 24, as modified from IAS 24 for the Indian context, how should Meridian treat the related party disclosure that would conflict with that requirement?

Meridian need not make the disclosure to the extent it conflicts with the statutory or regulatory confidentiality requirement. Ind AS 24 recognises that accounting standards cannot override law or regulation, so such conflicting disclosures are exempted.

  1. AThe disclosure is not required to the extent it conflicts with the statutory or regulatory confidentiality requirementCorrect
  2. BThe disclosure must still be made because accounting standards override statutes
  3. CThe disclosure must be made only in the auditor's report
  4. DThe disclosure must be made in full but with the amounts rounded off

Explanation

Ind AS 24 (paragraphs 4A and 4B) says disclosures that conflict with confidentiality requirements of statute or regulations are not required, because accounting standards cannot override legal or regulatory requirements. The option claiming standards override statutes reverses this position.

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