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

Sagar Textiles Ltd's financial statements are being prepared under Ind AS 24. A statute in India prohibits the company from disclosing the details of certain transactions with a related party because of confidentiality requirements. As per the Ind AS 24 comparison note with IAS 24, how should the company treat the related party disclosure of such transactions?

Sagar Textiles need not make the disclosure to the extent it conflicts with statutory or regulatory confidentiality requirements. Ind AS 24 recognises that accounting standards cannot override law or regulation, so such disclosures are not required, unlike IAS 24 where no such relief exists.

  1. ADisclosure is not required to the extent it conflicts with the statutory or regulatory confidentiality requirementsCorrect
  2. BDisclosure must be made in full because accounting standards override statutes
  3. CDisclosure must be made only in the auditor's report and not in the financial statements
  4. DDisclosure must be made only for transactions above a materiality limit fixed by the board

Explanation

The comparison with IAS 24 states that Ind AS 24 does not require disclosures that conflict with confidentiality requirements of statute or regulations, since accounting standards cannot override legal or regulatory requirements. The option saying standards override statutes is therefore wrong.

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