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

Pinnacle Steel Ltd is controlled by Rathi Infra Ltd, but they carry out no transactions with each other this year. The auditor asks whether the relationship still matters for Ind AS 24. Which statement fits the comparison with IAS 24 in Appendix 1 on paragraph 14?

Ind AS 24 modifies paragraph 14 to explain why the related party relationship is disclosed when control exists. The control relationship itself matters, so Pinnacle's relationship with Rathi Infra is relevant even without transactions. It does not depend on the parent publishing consolidated statements.

  1. AParagraph 14 was modified to explain the rationale for disclosing the related party relationship when control existsCorrect
  2. BParagraph 14 was deleted, so control relationships are disclosed only if transactions occur
  3. CParagraph 14 requires disclosure of the relationship only if the parent publishes consolidated statements
  4. DParagraph 14 requires disclosure only of the amount of the parent's shareholding

Explanation

Appendix 1 states that paragraph 14 was modified to explain the rationale for disclosing the related party relationship when control exists. Thus the standard treats the control relationship as significant itself; option B wrongly makes disclosure depend on transactions.

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