Related party transaction under AS-18

This query is : Resolved 

07 October 2008 Dear Sir,
Please clarify that whether the undermentioned transaction is covered under Accounting Standard-18 (Related party Disclosure)

We are "ABC Ltd" an indian co. formed under companies act 1956. We have formed a wholly owned subsidiary "ABC FZE" in Free Zone Entity Dubai.

"ABC FZE" purchase the 49 % shares of "XYZ LLC" a dubai based co & another 51 % shared is held by others.

"ABC Ltd." holding co. of "ABC FZE" sell the goods to "XYZ LLC".

Whether it will be related party transaction for ABC Ltd or not.


07 October 2008 In my opinion yes, in view of para 12 read with para 10 of the standard.

07 October 2008 need more clarification


07 October 2008 Yes. As 'ABC FZE' has significant influence in "XYZ LLC" through share holding & as 'ABC FZE'is 100% subsidiary of ABC Ltd hence the ABC has also significant influence in XYZ LLC so it will be treated as related party & disclosure as per AS 18 is to be done. Also refer para 13



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