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Mr. A controls A Ltd. (the reporting entity). He has only significant influence over B Ltd. Mrs. A (his spouse) has control over C Ltd. Under Ind AS 24, which of the following statements is most accurate from A Ltd.'s perspective?
ABoth B Ltd. and C Ltd. are related parties of A Ltd.
BOnly C Ltd. is a related party — significant influence by a controlling person does not extend the relationship to the influenced entity
CNeither B Ltd. nor C Ltd. is a related party of A Ltd. — both relationships are too remote
DOnly B Ltd. is a related party — Mrs. A's investments are excluded because she is a close family member, not the controlling person
Answer & Solution
Correct answer: A. Both B Ltd. and C Ltd. are related parties of A Ltd.
Para 9(b)(vi) treats an entity as related when controlled or jointly controlled by a person identified in 9(a) (which INCLUDES close family members). Para 9(b)(vii) treats an entity as related when a person controlling the reporting entity has significant influence over it. Mrs. A is a close family member of the controller of A Ltd., so C Ltd. is related; B Ltd. is also related via 9(b)(vii). Both are therefore related parties of A Ltd.
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