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

Rohini Ltd is a subsidiary of Himalaya Holdings Ltd. The finance head of Rohini argues that, since no transactions occurred between the two entities during the year, nothing about the parent need be disclosed. Which statement best reflects the rationale of Ind AS 24, as modified in paragraph 14, for the disclosure of the relationship?

Rohini must still disclose the parent relationship. Ind AS 24 paragraph 14 explains the rationale for disclosing a related party relationship where control exists, and the disclosure does not depend on whether transactions took place during the year, so the finance head's argument is not accepted.

1. ARelationship disclosure is needed only when transactions have occurred in the year
2. BRelationship disclosure is needed only when the parent prepares consolidated statements
3. CRelationship disclosure is needed only when the balances outstanding are material
4. DRelationships where control exists are disclosed irrespective of whether transactions have occurred, as the Ind AS 24 text explains the rationale for disclosing such relationshipCorrect