Difference Between AS 18 and Ind AS 24

Accounting Standard 18 - AS 18 prescribes the requirements for disclosure of related party relationship and transactions between the reporting enterprise and its related parties. The requirements of the standard apply to the financial statements of each reporting enterprise as also to consolidated financial statements presented by a holding company

Related party - parties are considered to be related if at any time during the reporting period one party has the ability to control the other party or exercise significant influence over the other party in making financial and/or operating decisions.

Ind AS 24 Related Party Disclosures

The objective of Ind AS 24 is to ensure that an entity’s financial statements contain the disclosures necessary to draw attention to the possibility that its financial position and profit or loss may have been affected by the existence of related parties and by transactions and outstanding balances, including commitments, with such parties.

Related party disclosure requirements as laid down in this Standard do not apply in circumstances where providing such disclosures would conflict with the reporting entity’s duties of confidentiality as specifically required in terms of a statute or by any regulator or similar competent authority.

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Difference Between AS 18 and Ind AS 24

Basis of Differences Ind AS 24 AS 18
Definition of Relative Uses the term ― a close member of the family of a person Uses the term ― relatives of an individual.
Relative covers Children, spouse or domestic partner, brother, sister, father and mother; children of that person‘s spouse or domestic partner; and dependants of that person or that person‘s spouse or domestic partner. Covers the spouse, son, daughter, brother, sister, father and mother
KMP Covers KMP of the parent as well KMP of the entity only
Related Parties in case of Joint Venture Co-venturers or co-associates are related to each other. Co-venturers or co-associates are not related to each other
Post-employment Benefits Specifically includes post-employment benefit plans for the benefit of employees of an entity or its related entity as related parties. Does not specifically cover entities that are post-employment benefit plans, as related parties
Next Most Senior Parent Additional disclosure is required for such parent. No such provision
Disclosure for Compensation Extended disclosures for compensation of KMP under different categories Not required.
Disclosure of ‘Amount of the Transactions’ vs ‘Volume of the Transactions The amount of the transactions need to be disclosed Option to disclose the - Volume of the transactions either as an amount or as an appropriate proportion
Government Related Entities Disclosures of certain information by the government related entities. Presently exempts the disclosure of such information