Advanced AccountingQuestion 5332 of 305
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8. P Ltd. has 60% voting right in Q Ltd. Q Ltd. has 20% voting right in R Ltd. Also, P Ltd. directly enjoys voting right of 14% in R Ltd. R Ltd. is a Listed Company and regularly supplies goods to P Ltd. The Management of R Ltd. has not disclosed its relationship with P Ltd. While preparing Financial Statements of P Ltd., which entities would you disclose as related parties with reference to AS-18?

Options

AQ Ltd.
BR Ltd.
CQ Ltd. and R Ltd.
DNeither of Q Ltd. or R Ltd.
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Correct Answer

Option CQ Ltd. and R Ltd.

All Options:

  • AQ Ltd.
  • BR Ltd.
  • CQ Ltd. and R Ltd.
  • DNeither of Q Ltd. or R Ltd.

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Detailed Solution & Explanation

Under AS 18 (Related Party Disclosures):
1. P Ltd. has 60% voting right in Q Ltd (subsidiary). Thus, Q Ltd. is a related party.
2. Q Ltd. has 20% voting right in R Ltd. and P Ltd. has 14% voting right in R Ltd. Combined holding in R Ltd = 34%. P Ltd has direct and indirect significant influence over R Ltd. Thus, R Ltd. is a related party.
Hence, **Option C** is the correct answer.

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