As per Accounting Standard 18-‘Related Party Disclosures’ issued by the ICAI, Related party means “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” and Related Party transaction means “a transfer of resources or obligations between related parties, regardless of whether or not a price is charged.
Fllowing are the examples of the related party transactions in respect of which disclosures may be made by a reporting enterprise:
• Purchases or sales of goods (finished or unfinished);
• Purchases or sales of fixed assets;
• Rendering or receiving of services;
• Agency arrangements;
• Leasing or hire purchase arrangements;
• Transfer of research and development;
• Licence agreements;
• Finance (including loans and equity contributions in cash or in kind);
• Guarantees and collateral etc.
• Management contracts including for deputation of employees