AS-18

This query is : Open

CA. Jyoti Baid (Querist)
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26 July 2009 Hello Sir/Madam,

ARE THE FOLLOWING RELATED PARTY TRANSACTIONS as per AS-18:

Preliminary expenses incurred by the promoters of the new company, who after incorporation become directors and shareholders of the company.

Brokerage earned by a stock broking company due to trading of shares on NSE/BSE by its related parties on their own account.

Thanks & Regards,
Jyoti Baid

Abhishek Mohta

Abhishek Mohta (Expert)
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27 July 2009 The first one will not be related party transaction whereas the second one is a related party transaction to be disclosed in Notes to Account.

CA. Jyoti Baid

CA. Jyoti Baid (Querist)
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27 July 2009 Thankyou for the reply.
I also agree with your opinion in the first case.
But what should be the reason or expanation to this as preliminary expense is incurred by the director who is the Key Management Personel of the company. KMP is a related party.
Please answer.

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