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

Sagar Textiles Ltd's management is preparing its related party note. A statute governing one of its regulated dealings prohibits the company from revealing details of that dealing with a related party. How does Ind AS 24, as notified in India, treat this situation?

Under Ind AS 24 as notified in India, disclosures that conflict with confidentiality requirements of a statute or regulation need not be made. An accounting standard cannot override legal or regulatory requirements, so Sagar Textiles is not required to disclose that restricted dealing.

  1. AThe disclosures that conflict with the statutory confidentiality requirement are not required to be made, because an accounting standard cannot override legal or regulatory requirementsCorrect
  2. BThe disclosures must still be made in full, because the Ind AS overrides any statute on confidentiality
  3. CThe disclosures must be made only in the auditor's report and not in the financial statements
  4. DThe disclosures must be made in the financial statements but with the counterparty name replaced by a code

Explanation

The comparison with IAS 24 notes that in Ind AS 24 disclosures which conflict with confidentiality requirements of statute or regulations are not required, since accounting standards cannot override legal or regulatory requirements. Hence the option that insists on full disclosure is wrong because it ignores this carve-out.

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