Related Party Transaction Schedule: AS 18 Evidence File
✓ Reviewed by CA Nikhil Gupta · Last reviewed 20 June 2026
Related-party schedules should not be prepared from memory at audit time. Finance needs a live register of parties, transactions, balances, approvals and disclosures.
For broader context, see the Companies Act, MCA and Startup Compliance Hub.
Detailed analysis
AS 18 establishes disclosure requirements for related-party relationships and transactions. The finance risk is missing entities controlled by founders/directors, unrecorded balances, or transactions not supported by contracts/approvals.
Which standard actually applies: AS 18 or Ind AS 24?
For companies on the Ind AS track specifically, see Ind AS 24: Related Party Disclosures — Detailed Guide.
Practical example
Founder-owned company provides marketing support worth ₹6 lakh. Finance checks related-party status, agreement, invoice, board/approval requirement, arm’s-length support and disclosure in financial statements.
Evidence and control checklist
| Area | What to check | Evidence to save |
|---|---|---|
| Related party master | Directors, KMP, relatives, group entities and control relationships. | Declaration forms and entity chart. |
| Transaction capture | Sales, purchases, loans, reimbursements and guarantees. | Ledger extract and contract/invoice support. |
| Approval trail | Board/shareholder/audit committee as applicable. | Minutes, resolutions and approval notes. |
| Balance confirmation | Receivable/payable/loan balances. | Confirmations and ageing. |
| Disclosure | AS 18/Schedule III disclosure support. | Disclosure schedule and management representation. |
For the connected rule, example or next step, see Founder Salary and Reimbursement Controls: Related-Party and Tax Evidence.
Common mistakes
- Relying only on vendor/customer name search.
- Missing founder-controlled entities.
- No balance confirmations.
- Transactions without agreement or approval.
- Disclosure prepared after audit queries only.
Official reference framework
Based only on official India Code, MCA and ICAI source pages listed below. Check the latest Companies Act, Schedule III, accounting standards, Ind AS/AS applicability and auditor guidance before closing or filing.
Official sources used
This article is intentionally source-limited to official India Code, MCA and ICAI material. Source validation date: 17 June 2026. Verify final positions with latest Companies Act, Schedule III, accounting standards, Ind AS/AS applicability and auditor guidance before closing or filing.
- ICAI: Accounting Standard (AS) 18 Related Party Disclosures
- ICAI: Accounting Standards as on February 1, 2022
- India Code: Companies Act, 2013 official PDF
- India Code: Schedule III to the Companies Act, 2013
For the connected rule, example or next step, see Related Party Transactions Under Section 188.
FAQs
AS 18 applies if your company is not required to follow Ind AS. Ind AS 24 applies instead if your company falls under MCA’s Ind AS roadmap — broadly listed companies and larger unlisted companies above the applicable net-worth or turnover thresholds. Check your company’s current Ind AS applicability status before choosing which standard to disclose under.
Directors, key managerial personnel, their relatives, and entities they control or significantly influence should all provide written declarations at the start of each financial year and whenever their related-party status changes — a one-time declaration at incorporation is not sufficient.
Yes — material related-party receivable, payable and loan balances should be independently confirmed and aged, not just carried forward from the prior year’s ledger. Missing confirmations are a common reason related-party balances draw an audit qualification.
Yes. Section 188 of the Companies Act, 2013 requires board approval for related-party contracts and arrangements, with audit-committee approval and, above prescribed thresholds, shareholder approval by ordinary resolution — with the related party abstaining from voting. The exact threshold and approval level depend on the transaction’s nature and value.
Related-party declarations, the underlying contract or agreement, board/audit-committee/shareholder approval minutes, invoices or transaction support, balance confirmations, and the final AS 18/Ind AS 24 disclosure schedule reconciled to the financial statements — saved together, not reconstructed at audit time.
Source and review trail
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.
- Primary category
- Companies Act & MCA
- Official starting point
- www.mca.gov.in