Related party disclosure
This query is : Resolved
29 November 2013
A pvt company receiving loan from its directors. is it a related party transaction as per AS-18?
29 November 2013
clause (d) of para 3 of AS 18 is re-produced below:
(d) key management personnel and relatives of such personnel;
and
Directors are Key Management personnel hence any transaction with directors is fall under the sweep of AS 18.
For further reference please visit:
https://220.227.161.86/27284asb-as-18.pdf
(d) key management personnel and relatives of such personnel;
and
Directors are Key Management personnel hence any transaction with directors is fall under the sweep of AS 18.
For further reference please visit:
https://220.227.161.86/27284asb-as-18.pdf
29 November 2013
As per AS-18 related party includes Key Managerial Person
Key management personnel are those persons who have the authority
and responsibility for planning, directing and controlling the activities
of the reporting enterprise. For example, in the case of a company, the
managing director(s), whole time director(s), manager and any person in
accordance with whose directions or instructions the board of directors of
the company
is accustomed to act, are usually considered key management personnel.
Explanation:
A non-executive director of a company is not considered as a key
management person under this Standard by virtue of merely his being a
director unless he has the authority and responsibility for planning, directing
and controlling the activities of the reporting enterprise. The requirements
of this Standard are not applied in respect of a non-executive director even
Key management personnel are those persons who have the authority
and responsibility for planning, directing and controlling the activities
of the reporting enterprise. For example, in the case of a company, the
managing director(s), whole time director(s), manager and any person in
accordance with whose directions or instructions the board of directors of
the company
is accustomed to act, are usually considered key management personnel.
Explanation:
A non-executive director of a company is not considered as a key
management person under this Standard by virtue of merely his being a
director unless he has the authority and responsibility for planning, directing
and controlling the activities of the reporting enterprise. The requirements
of this Standard are not applied in respect of a non-executive director even
29 November 2013
As per AS-18, Related Party Transaction covers:
1. Salary to Director
2. Advance against share capital given
3. Lease Rent on equipment received
4. Securities Deposit Receipt-Refunded
5. Unsecured Loan (taken/given/returned)
6. Loan & Advances
7. Share application money invested
8. Share Application money received
9. Shares Issued.
As per AS-18, Related Party Transaction covers:
1. Salary to Director
2. Advance against share capital given
3. Lease Rent on equipment received
4. Securities Deposit Receipt-Refunded
5. Unsecured Loan (taken/given/returned)
6. Loan & Advances
7. Share application money invested
8. Share Application money received
9. Shares Issued.
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