CA Inter P1 · Chapter 2 · Question 6 of 12
Which of the following parties would NOT, by itself, be treated as a related party of Ashoka Plastics Ltd under AS 18?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) A single major customer on whom the company is economically dependent
Explanation
AS 18 specifically states that a single customer, supplier, franchisor, distributor or general agent with whom an enterprise transacts a significant volume of business is not a related party merely because of the resulting economic dependence. A holding company, an associate and key management personnel such as the managing director are related parties.
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