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CA Intermediate · Advanced Accounting · AS 18 Related Party Disclosures

Under AS 18, in which situation is disclosure of related party transactions NOT required in the financial statements of a state-controlled enterprise?

A state-controlled enterprise need not disclose transactions with another state-controlled enterprise just because both are controlled by the same government. AS 18 grants this exemption specifically. Dealings with key management personnel, associates or a non-state holding company still require disclosure.

  1. ATransactions with its key management personnel
  2. BTransactions with another state-controlled enterprise merely because both are controlled by the same State GovernmentCorrect
  3. CTransactions with its associate
  4. DTransactions with its holding company which is not state-controlled

Explanation

AS 18 exempts state-controlled enterprises from disclosing transactions with other state-controlled enterprises and the government. Transactions with KMP, associates and a holding company are not exempt. The standard states that this exemption applies for state-controlled parties only, so the other options remain disclosable.

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