Accounting · Indian Accounting Standards (Ind AS)
Under Ind AS 24, an entity needs to ascertain whether a party is a related party, particularly where key management personnel or their close family has significant influence. Why is this identification necessary?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Transactions with related parties must be disclosed even if they are not at arm's length, and correct identification is essential for transparency.✓
- 2Related party status is only relevant for entities in which the parent holds more than 50% voting power.
- 3Significant influence guarantees control, requiring the entity to consolidate that party.
- 4The entity can ignore disclosure if the transaction amounts are immaterial.
Correct answer
Transactions with related parties must be disclosed even if they are not at arm's length, and correct identification is essential for transparency.
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