Disclosure Requirements Under Ind AS 24 for Aggregating vs. Separately Reporting Related Party Transactions

When it comes to financial transparency, the way companies disclose their transactions can make all the difference. This becomes particularly crucial in the case of related party transactions, those dealings between a company and entities it has close ties with. In the world of accounting under Ind AS 24, Related Party Disclosures it’s not just about what you disclose, but how you do it.

When companies engage in numerous related party transactions, the question isn’t just about what to disclose, but how. In this document, a company undertook various high-value dealings, including purchases from its parent and another related party. Ind AS 24 allows aggregation of similar transactions, but only to a point. The real challenge arises when certain transactions differ in nature or involve key relationships, making it unclear whether they should be grouped or presented separately. This creates a grey area where companies must carefully evaluate the nature and significance of each transaction to determine the most appropriate disclosure approach.

This document covers how such decisions are guided by the specific provisions of Ind AS 24 and examines whether aggregation or separate disclosure is warranted in the given scenario.

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