Where there is an indirect influence (through other companies having control/significant influence in the reporting enterprise - i.e. company in which the individual has substantial interest, is a shareholder of reporting enterprise) of an individual can that individual be treated as a related party of the reporting enterprise
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AS 18_Opinion required (urgent)
Replies (6)
i m not able to understand your query, please explain in simple words
for eg: Reporting Entp. - ABC Ltd.
X ltd, Y ltd, Zltd, P ltd collectively hold 60% stake in ABC Ltd.
Mr. T has substantial interest in all - X ltd, Y ltd, Z ltd & P Ltd.
Can Mr. T be treated as a Related Party under AS 18 for ABC ltd.
yes as per AS - 18 Mr. T will be treated as an related party
If any of X ltd, Y ltd, Z ltd & P Ltd has substantial interest in ABC Ltd than only Mr T will be a Related Party is AS 21 is not applicable and
if AS 21is applibable Mr T is a Related Party
Related Parties include parties that have control or have significant influence over reporting entity (includes Parent company, major investors) In the given case Mr.T has substantial interest in X ltd, Yltd, Zltd and P ltd (Major investors) and therfore Mr.T will be treated as Related party.
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