Ind AS 24, Related Party Disclosures, establishes the requirements for disclosing information about relationships and transactions with related parties. The standard aims to enhance transparency and ensure that financial statements provide relevant and reliable information about an entity’s relationships with related parties and the potential impact of these relationships on its financial position and performance.
Under Ind AS 24, related parties include individuals or entities that have the ability to control or exercise significant influence over the financial and operating policies of the reporting entity, or those with common control or significant influence over both the reporting entity and another entity.
The standard requires entities to disclose the nature of related party relationships and provide information about transactions, outstanding balances, and commitments with related parties. This includes disclosure of the name of the related party, the nature of the relationship, a description of the transactions, the volume of the transactions, and any outstanding balances or commitments at the reporting date.
Ind AS 24 also requires disclosure of key management personnel and their compensation, including salaries, bonuses, share-based payments, and other benefits. Additionally, entities are required to disclose any other significant related party transactions, such as guarantees or contingent liabilities, that may have an impact on the financial position or performance of the reporting entity.
