Documentos de Académico
Documentos de Profesional
Documentos de Cultura
RELATED PARTY
A related party is essentially any party that controls or can significantly influence the management or operating policies of the company during the reporting period
with the reporting enterprise Associates and joint ventures of the reporting enterprise and the investing party or venture in respect of which the reporting enterprise is an associate or a joint venture
Contd..
Individuals owing an interest in the voting power of the reporting enterprise that gives them control or significant influence over
the enterprise and relatives of any such individual. Directors or major shareholders of the reporting enterprise
EXAMPLE
IDENTIFY THE RELATED PARTIES X limited holds 51% of Y limited Y limited holds 51% of z limited O limited holds 49% of z limited
i) control by ownership ii) control over composition of board iii) control of substantial interest in the voting power
Contd..
On the basis of significant influence i) by representation of the board of
directors ii) participation in policy making process iii) material inter- company transactions iv) inter-change of managerial personnel v) dependence on technical information
A single customer, supplier, franchiser, distributor, or general agent with whom an enterprise transacts a significant volume of business Providers of finance;
Trade unions; Public utilities;
reporting enterprises duties of confidentiality as specifically required in terms of a statute or by any regulator In case a statute or a regulator or a similar competent authority governing an enterprise prohibit the enterprise to disclose certain information No disclosure is required in consolidated financial statements in respect of intra-group transactions.
statements of state controlled enterprises as regards related party relationships with other state-controlled enterprises and transactions with such enterprises.
Purpose of disclosure
A related party relationship could have an effect on
may be affected by a related party relationship even if related party transactions do not occur.
Related party relationships are a normal feature of commerce and business.
AS 18 VS IFRS/IAS 24
Basis of distinction are:
Meaning State controlled ethics Pricing policies
CASE STUDY
SATYAM SAGA
Details
Proposal to acquire Maytas Infra and Maytas Properties at $1.6 bn
Satyam
Maytas
Investment amount Raju sons as Promoters of Maytas Deal not approved by shareholders Over valuation of Maytas 4 independent directors resigned Disclosure of facts by Raju
Facts disclosed
Inflated cash and bank balance Understated liabilities Overstated debtor position Overstated profit position
&
Trust is like a vase ,once it breaks though you can fix it but the vase will never be same again