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Query in related party

Indian Accounting Standards 1231 views 6 replies

I would like to know whether transactions with the trust should be disclosed as a related party transaction in the Annual Report ( say if the company has done contributions towards a trust where the key personnel is the trustee in that trust). should this be taken as a related party transaction?

Replies (6)

Puja,

Does KMP plays a role in functioning of the trust??

As per my opnion,

Yes it is.

because, any person who can affect /influence or in capacity of to influence the transaction betwwn two parties are to be tretated as related parties.

and as such key person is the trustee in the Trust, transaction is to be treated as related party transaction.

HI ,

AS PER AS-18, KEY MANAGEMENT PERSONNEL  AND OF SUCH PERSONNEL  ARE THOSE PERSONS WHO HAVE AUTHORITY AND RESPONSIBILIY FOR PLANNING ,DIRECTING AND CONTROLLING THE ACTIVITIES OF THE REPORTING ENTERPRISE AND ENTERPRISE OVER WHICH THE INDIVIUAL OR KEY MANAGEMENT PERSONNEL  DESCRIBED ABOVE  IS ABLE TO EXERCISE SIGNIFICANT INFLUENCE.THIS INCLUDES THE ENTRPRISES OWNED BY THE DIRECTORS OR MAJOR SHARE HOLDERS OF THE REPORTING ENTERPRISE.

NOW, SO ANY OF THE KEY MANAGEMENT PERSONNEL OR THE RELETIVE THEROF HAVE SIGNIFICANT INFLUENCE IN THE TRUST IN WHICH THE COMPANY HAS MADE THE DONATION .THEN AS-18 WILL APPLY AND YOU ARE RQUIRED TO MAKE REPORTING OF THE SAME IN THE ANNUAL REPORT.

Yes u have 2 dear..

thanks to all smiley

Yes it should be disclosed


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