I have An idea to introduce a wholly new Function to manager-RELATED PARTY DISCLOSURE.
There is a checkbox Named "Whether it is related party"In Suppliers,Customers,Employess,Special Accounts,Capital Accounts. So,The Transaction With them is to reported separately.
In receipts and payments there is also a checkbox for related party transaction.
And
There is a separate report in which all transactions with related parties are to shown in a specified period.
As it is mandatory to disclouse Related party transactions Separately in Financial Statements in INDIA as per Accounting Standard 18 For all Small and Medium sized businesses.
Related party disclosure is an accounting standard in every country and not only India. You can use custom fields and custom control accounts to keep track of related party transactions.
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@Abeiku But with Custom Fields Separate Disclourse is not possible and there is numerous transactions in each FY with related parties and It is not possible to do it in excel. I think there must be a In-built function to disclouse related party transactions.
Give 3 related party transaction types and let us discuss how we can track them in Manager.
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- Goods Sold/Purchased to A Major
Shareholder/Partner. - Loan given/Taken from Key Managerial
person. - Any Contract Given To/ Taken From
Related party.
You can create a custom field to track this. You may leave this custom field for all arms length transactions and enter let say “RP” or anything that can help you easily generate a report for the transactions with RP in the Custom Report tool. Yes you can generate reports based on custom fields in the custom report tool. You can do so much with that tool.
You can also have a control account and special accounts made up of RP customers or suppliers. You can always enter this control account and see balances with RP and drill down to see transactions and other information.
You can even add RP to the name of contacts who are related party so that you can easily generate a transaction report for every Related Party.
@Abeiku As per Accounting Standards related party transactions are to be disclosed in notes to Accounts only not on the face of finnancial statements. So if i make a control account then it would be shown on the face of balance sheet under Debtors and for cash transactions with RP how can i do for that.
By using custom fields for tracking RP Transactions can you please illustrate my given transactions
If you take Receivables for example, you will aggregate all receivables (RP and Arms length) on the face of the financial statement. But you must disclose details about RP in the notes. You must disclose the following;
- the amount of the transactions (for each related party)
- the amount of outstanding balances, including terms and conditions and guarantees
- provisions for doubtful debts related to the amount of outstanding balances
- expense recognised during the period in respect of bad or doubtful debts due from related parties
My suggestion will make it easy for you to get information for the disclosure notes.
The answer I provided will work for all the three scenarios you have above
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For Disclourse in notes i need information of RP Transactions at one place.
Like there are total of 200 Debtor’s out of which 55 are related parties then How Should i get Information of transaction with then (for credit transactions i get the the information by custom fields) but For cash sales to them how will i get transaction details?
