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Editorial Board on Accounts and Audit
  • RPT

    by Kamal on Monday, December 30, 2019 at 06:44 PM

    Whether dividend paid by subsidiary to holding a related party "transaction" under Ind AS 24 and whether any disclosure is required for the same

    Replied byEditorial Board Thursday, January 16, 2020 at 12:52 PM

    As per para 9 of the Ind AS 24 Related party disclosure, if entity and reporting entity are the members of the same group then they are related party which means each parent, subsidiary and fellow subsidiary is related to the others. Also, para 9 states that a related party transaction is a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged.

    As per para 18 of Ind AS 24, nature of the relationship and information about the transaction shall be disclosed in separate financial statement of subsidiary and holding.

    Therefore, dividend paid by subsidiary to holding does fall under the related party “transaction” as per Ind AS 24 and disclosure regarding to the nature of relationship, amount of transaction and nature of the transaction is required.

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