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PRESENTATION ON “RELATED PARTY DISCLOSURES” IAS 24 Vs. AS 18 AN OVERVIEW JULY 9, 2010

PRESENTATION ON “RELATED PARTY DISCLOSURES” IAS 24 Vs. AS 18 AN OVERVIEW JULY 9, 2010. 1. CONTENTS AS 18 Vs. IAS 24: AN OVERVIEW. SPECIFIC DIFFERENCES: BASIC DIFFERENCES IN DEFINITIONS ETC WHEN INDIVIDUALS ARE INVOLVED AS STAKEHOLDERS WHEN ENTITIES ARE INVOLVED AS STAKEHOLDERS

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PRESENTATION ON “RELATED PARTY DISCLOSURES” IAS 24 Vs. AS 18 AN OVERVIEW JULY 9, 2010

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  1. PRESENTATION ON “RELATED PARTY DISCLOSURES” IAS 24 Vs. AS 18 AN OVERVIEW JULY 9, 2010 1 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  2. CONTENTSAS 18 Vs. IAS 24: AN OVERVIEW • SPECIFIC DIFFERENCES: • BASIC DIFFERENCES IN DEFINITIONS ETC • WHEN INDIVIDUALS ARE INVOLVED AS STAKEHOLDERS • WHEN ENTITIES ARE INVOLVED AS STAKEHOLDERS • OTHER DIFFERENCES • ADDITIONAL DEFINITIONS AND CLARIFICATIONS 2 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  3. PRIMARY ACCOUNTING REFERENCES AS 18: “RELATED PARTY DISCLOSURES” IAS 24: “RELATED PARTY DISCLOSURES” EXPOSURE DRAFT: “AS 18 (REVISED 20XX) CORRESPONDING TO IAS 24” ACCOUNTING STANDARD INTERPRETATIONS ASI 13 (AGGREGATION OF TRANSACTIONS) ASI 19 (INTERPRET THE TERM ‘INTERMEDIARIES’) ASI 21 (NON EXECUTIVE DIRECTORS…….) GUIDANCE NOTE ON REMUNERATION PAID TO KEY MANAGEMENT PERSONNEL 3 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  4. BASIC DIFFERENCES IN DEFINITIONS, ETC. 4 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  5. RELATIVES Vs. CLOSE FAMILY MEMBERS EXTENDED/RELAXED 5 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  6. EXTENDED/RELAXED RELATIVES Vs. CLOSE FAMILY MEMBERS AS 18: RELATIVES • Spouse; • Son; Daughter; • Brother; Sister; • Father; and Mother; IAS 24: CLOSE MEMBERS OF FAMILY • Spouse/domesticpartner; • Children of the person or of spouse or of domestic partner; and • Dependents of the person or of spouse or of domestic partner; who may be expected to influence the individual/person or be influenced by the individual/person. 6 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  7. EXTENDED DEFINITION OF KMP EXTENDED 7 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  8. EXTENDED COVERAGE OF KMP EXTENDED 8 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  9. AS 18: S is related to Mr. X in S’ financial statements S is not related to Mr. Y in S’ financial statements IAS 24 S is related to both Mr. X and Mr. Y in S’ financial statements EXTENDED EXTENDED COVERAGE OF KMP Mr. X (KMP) Mr. Y (KMP) Subsidiary (S) Parent (P) Kaushal Kishore. DRAFT FOR DISCUSSIONS

  10. EXTENDED/RELAXED DIFFERENCE IN DEFINITION OF GOVT………. 10 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  11. DIFFERENCES WHEN INDIVIDUALS ARE INVOLVED AS STAKEHOLDERS 11 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  12. DIFFERENCES: WHEN INDIVIDUALS ARE STAKEHOLDERS RELAXED 12 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  13. IAS 24 Paras 9(a)(i)(ii)(iii) and 9(b)(vi) POSITION AS TO INDIVIDUALS AS STAKEHOLDERS IN IAS 24 IAS 24 Paras 9(a)(i) and 9(b)(vii) Mr. X Mr. X Entity B Control or joint control Entity B Significant influence or KMP Entity A Control or joint control or significant influence or KMP Entity A control or joint control IAS 24: A AND B ARE RELATED TO EACH OTHER IN THEIR FINANCIAL STATEMENTS Kaushal Kishore. DRAFT FOR DISCUSSIONS

  14. AS 18 Para 3(c)(d)(e) POSITION AS TO INDIVIDUALS AS STAKEHOLDERS IN AS 18 Mr. X Entity A Control or Significant influence or KMP Entity B Control or Significant influence or KMP • AS 18: • A and B are related to each other in both their financial statements. CONTROL AND SIGNIFICANT INFLUENCE IN AS 18 [para 3(c)] ARE PRIMARILY CONSEQUENT TO VOTING POWER. IN IAS 24, VOTING POWER IS NOT THAT RELEVANT Kaushal Kishore. DRAFT FOR DISCUSSIONS

  15. IAS 24 Para 9(b)(vi) and AS 18 Para 3(c)(d)(e) DIFFERENCE ON ACCOUNT OF JOINT CONTROL UNIFORMITY • IAS 24: • A and B are related to each other if there is joint control in both. • AS 18: • Does not use the term joint control in relation to individuals. However, by implication, joint control is generally regarded as an influence that is stronger than significant influence. Mr. X Entity A Joint control Entity B Control or Joint control or Significant influence or KMP Kaushal Kishore. DRAFT FOR DISCUSSIONS

  16. IAS 24: Entities over which significant influence is exercised by a common person are not related to each other. AS 18: A and B are related to each other in both their financial statements. RELAXED DIFFERENCE WHEN AN INDIVIDUAL HAS SIGNIFICANT INFLUENCE Mr. X Significant influence over entity A Significant influence over entity B • . Kaushal Kishore. DRAFT FOR DISCUSSIONS

  17. IAS 24: Entities having common KMP are not related to each other. AS 18: A and B are related to each other in both their financial statements. RELAXED DIFFERENCE WHEN AN INDIVIDUAL IS A COMMON KMP Mr. X KMP of entity A KMP of entity B • . Kaushal Kishore. DRAFT FOR DISCUSSIONS

  18. IAS 24: An entity in which a person has significant influence, would not be related to other just because that person is a KMP of the other entity AS 18: A and B are related to each other in both their financial statements. RELAXED DIFFERENCE WHEN AN INDIVIDUAL HAS KEY POSITION AND SIGNIFICANT INFLUENCE Mr. X Significant influence over entity A KMP of entity B • . Kaushal Kishore. DRAFT FOR DISCUSSIONS

  19. DIFFERENCES WHEN ENTITIES ARE INVOLVED AS STAKEHOLDERS 19 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  20. DIFFERENCE WHEN ENTITIES ARE INVOLVED AS STAKEHOLDERS EXTENDED 20 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  21. AS 18: [para 3(b)] Co ventures or co associates are not related to each other. (anomaly). IAS 24: [paras 9(b)(iii) (iv)] B and C are related to each other in both their financial statements if they are either co ventures or one is a venture and the other is an associate. Co associates are not related to each other (as in AS 18 also). EXTENDED DIFFERENCE ON ACCOUNT OF JOINT VENTURES AND ASSOCIATES Entity A Entity B Joint venture or an associate Entity C Joint venture Kaushal Kishore. DRAFT FOR DISCUSSIONS

  22. OTHER DIFFERENCES 22 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  23. REGULATORY DISCLOSURES SUBJECT TO CONFIDENTIALITY 23 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  24. AS 18: No specific coverage as to entities that are post employment benefit plans, as related parties. IAS 24: [para 9(b)(v)] A and B are related to each other in both their financial statements EXTENDED DIFFERENCE ON ACCOUNT OF POST EMPLOYMENT BENEFIT PLANS Entity A Entity B Post employment benefit plan for the benefit of employees of Entity A or entity related to A Kaushal Kishore. DRAFT FOR DISCUSSIONS

  25. EXTENDED DISCLOSURES OF MANAGERIAL COMPENSATION EXTENDED/IMPLEMENTATION 25 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  26. OPTION AS TO DISCLOSURE OF VOLUME OF TRANSACTIONS OPTION/EXTENDED 26 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  27. EXTENDED ADDED DISCLOSURES FOR GOVT RELATED ENTITIES………. 27 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  28. ADDITIONAL DEFINITIONS IN AS-18 28 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  29. CLARIFICATORY ADDITIONAL DEFINITIONS IN AS 18, THOUGH NOT IN IAS 24 29 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  30. CLARIFICATIONS IN AS-18 30 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  31. CLARIFICATORY CLARIFICATORY TEXT IN AS-18, THOUGH NOT IN IAS 24 31 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  32. CLARIFICATORY CLARIFICATION REGARDING AGGREGATION OF TRANSACTIONS 32 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  33. RECAP……. 33 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  34. RECAP………. DIFFERENCES: IAS 24 Vs. AS 18 BASIC DIFFERENCES IN DEFINITIONS ETC WHEN INDIVIDUALS ARE INVOLVED AS STAKEHOLDERS WHEN ENTITIES ARE INVOLVED AS STAKEHOLDERS OTHER DIFFERENCES ADDITIONAL DEFINITIONS AND CLARIFICATIONS 34 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  35. THANK YOU FOR YOUR KIND ATTENTION The information contained herein is of general nature and is for discussions only 35 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  36. CONTACT DETAILS: KAUSHAL KISHORE +91-9811103133 kaushalkishore@kpmg.com 36 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  37. Kaushal Kishore. DRAFT FOR DISCUSSIONS

  38. COVERAGE OF COMMITMENTS CLARIFICATORY 38 Kaushal Kishore. DRAFT FOR DISCUSSIONS

  39. CLARIFICATORY CLARIFICATION REGARDING REGULATORY DISCLOSURES 39 Kaushal Kishore. DRAFT FOR DISCUSSIONS

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