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

Sagar Textiles Ltd, an Ind AS reporting company, is asked by a statute-based regulator to keep certain details of a transaction with a related party confidential. Sagar's accountant proposes to omit the related disclosure on that ground. Under Ind AS 24, as modified from IAS 24, what is the correct position?

Ind AS 24 does not require disclosures that conflict with confidentiality requirements of statute or regulations. This is a carve-out from IAS 24, because an accounting standard cannot override legal or regulatory requirements. So Sagar may omit only the conflicting disclosure, with no consent or turnover threshold test needed.

  1. ADisclosures that conflict with confidentiality requirements of statute or regulations are not required to be made, because an accounting standard cannot override legal or regulatory requirementsCorrect
  2. BAll related party disclosures must be made in full, because an accounting standard overrides any statutory confidentiality requirement
  3. CDisclosure is required only if the related party gives written consent to the company, irrespective of the statute
  4. DDisclosure is waived only if the transaction value is below 10% of the company's turnover

Explanation

Ind AS 24 (paragraphs 4A and 4B) differs from IAS 24: disclosures conflicting with confidentiality requirements of statute or regulations are not required, since accounting standards cannot override legal or regulatory requirements. The option saying the standard overrides law is the IAS 24 style view and is wrong for Ind AS 24. The consent and 10% turnover conditions are not in the standard.

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