[Illustrative Checklist] Disclosure requirements under AS 18 | Related Party Disclosures
- Blog|News|Account & Audit|
- 2 Min Read
- By Taxmann
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- Last Updated on 15 February, 2023
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The objective of AS 18, Related Party Disclosures, is to prescribe the requirements for disclosure of related party relationships and transactions between the reporting enterprise and its related parties. The requirements of the standard apply to the financial statements of each reporting enterprise as also to consolidated financial statements presented by a holding company. Related parties are considered to be related if at any time during the reporting period one party has the ability to control the other party or exercise significant influence over the other party in making financial and/or operating decisions.
As per the stipulation of this standard, an entity must comply with the below-mentioned disclosure requirements:
I. Where entity is having control over other entity, irrespective of whether or not there have been transactions between the related parties, has the entity disclosed the following:
a. Name of the related party
b. Nature of the related party relationship
II. If there have been transactions between related parties, during the existence of a related party relationship, whether the reporting enterprise disclosed the following:
a. The name of the transacting related party
b. A description of the relationship between the parties
c. A description of the nature of transactions
d. Volume of the transactions either as an amount or as an appropriate proportion?
e. Any other elements of the related party transactions necessary for an understanding of the financial statements
f. The amounts or appropriate proportions of outstanding items pertaining to related parties at the balance sheet date and provisions for doubtful debts due from such parties at that date
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