Skip to content

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

Sahyadri Textiles Ltd, a listed company, has a statutory regulation that prohibits it from revealing certain details of dealings with a government-controlled entity that is a related party. Management asks whether Ind AS 24 requires it to make those particular disclosures despite the regulation. Which view is consistent with Ind AS 24 as notified in India?

Sahyadri need not make the disclosures that conflict with statutory or regulatory confidentiality. Ind AS 24 as notified in India contains this carve-out because accounting standards cannot override legal or regulatory requirements, so such disclosures are not required.

  1. AThe disclosures conflicting with statutory or regulatory confidentiality requirements are not required to be made, because accounting standards cannot override legal or regulatory requirementsCorrect
  2. BThe disclosures must be made in full, because Ind AS always overrides statutes on confidentiality
  3. CThe disclosures must be made only to the auditor and omitted from the financial statements, with a note of the omission amount
  4. DThe disclosures must be made after obtaining written consent from the Registrar of Companies in every case

Explanation

The Indian version of Ind AS 24 (paragraphs 4A and 4B) exempts disclosures that conflict with confidentiality requirements of statute or regulations, since accounting standards cannot override legal or regulatory requirements. This is a carve-out from IAS 24. The option saying Ind AS overrides statutes is wrong for that reason.

Did you get it right without looking?

One question tells you little. A timed set on Ind AS 24 Related Party Disclosures shows your real accuracy, how long you take and where you lose marks.

Practise Ind AS 24 Related Party DisclosuresFree diagnostic mock

More Ind AS 24 Related Party Disclosures questions