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Educational Material on Ind AS 24 Related Party Disclosures
Ind AS 24 Related Party Disclosures : Ind AS 24 Related Party Disclosures requires disclosures about transactions and outstanding balances with an entity’s related parties. The standard defines various classes of entities and people as related parties and sets out the disclosures required in respect of those parties, including the compensation of key management personnel. Ind AS 24 was reissued in November 2009 and applies to annual periods beginning on or after 1 January 2011.
History of Ind AS 24
| Date | Development | Comments |
|---|---|---|
| March 1983 | Exposure Draft E25 Disclosure of Related Party Transactions | |
| July 1984 | Ind AS 24 Related Party Disclosures issued | Effective 1 January 1986 |
| 1994 | Ind AS 24 was reformatted | |
| 18 December 2003 | Ind AS 24 Related Party Disclosures | Effective for annual periods beginning on or after 1 January 2005 |
| 22 February 2007 | Exposure Draft State-controlled Entities and the Definition of a Related Party published | Comment deadline 25 May 2007 |
| 11 December 2008 | Exposure Draft Relationships with the State (Proposed amendments to Ind AS 24) published | Comment deadline 13 March 2009 |
| 4 November 2009 | Ind AS 24 Related Party Disclosures issued | Effective for annual periods beginning on or after 1 January 2011 |
| 12 December 2013 | Amended by Annual Improvement IFRSs 2010-2012 cycle (entities providing key management personnel services) | Effective for annual periods beginning on or after 1 July 2014 |
Educational Material on Ind AS 24 Related Party Disclosures
Ind AS 24 Related Party Disclosures : Ind AS 24 along with other Ind ASs has been notified by the Ministry of Corporate Affairs (MCA) on February 25, 2011. However, the date of its implementation is yet to be notified. Ind AS 24 governs the disclosure of related party relationships, transactions and outstanding balances, including commitments, in the consolidated and separate financial statements of a parent, a venturer or an investor presented in accordance with the Indian Accounting Standard (Ind AS) 27- Consolidated and Separate Financial Statements. This Standard also applies to individual financial statements. Ind AS 24 – Related Party Disclosures is the only standard that looks up the definition of Relatives under the Companies Act for defining close members under the standard. The new Companies Act, 2013 includes the revised definition of Relatives.
Objective of Ind AS 24
The objective of Ind AS 24 is to ensure that an entity’s financial statements contain the disclosures necessary to draw attention to the possibility that its financial position and profit or loss may have been affected by the existence of related parties and by transactions and outstanding balances with such parties
SCOPE of Ind AS 24
The purpose of this Invitation to Comment is to seek feedback on a proposed standard for the disclosure of information about transactions between the entity and its related parties necessary for users to understand the effect that those transactions may have had on its financial position and performance.
Disclosure
Relationships between parents and subsidiaries. Regardless of whether there have been transactions between a parent and a subsidiary, an entity must disclose the name of its parent and, if different, the ultimate controlling party. If neither the entity’s parent nor the ultimate controlling party produces financial statements available for public use, the name of the next most senior parent that does so must also be disclosed. [Ind AS 24.16]
Management compensation. Disclose key management personnel compensation in total and for each of the following categories: [Ind AS 24.17]
- short-term employee benefits
- post-employment benefits
- other long-term benefits
- termination benefits
- share-based payment benefits
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Educational Material on Ind AS 24 Related Party Disclosures
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Educational Material on Ind AS 24 Related Party Disclosures
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