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A related party is a person or an entity that is somehow related to the entity putting together a financial statement.
This could be someone who has partial control or ownership of the reporting company. It could also be someone related to the owners, like a family member. Related parties can also be subsidiaries of the parent company that's reporting or a joint venture.
Any entity which can have a significant influence on the policies of the reporting business or have direct ownership is considered a related party.
The most common related-party transactions are done between a parent company and its subsidiaries. The list of potential related parties includes shareholder groups and business affiliates.
A related-party transaction is any purchase or agreement made between two related entities.
Related Party Balance means where shareholder / controlling interest of company holding controlling interest either directly or indirectly in other enterprises in which company has to pay or received shall be declared as related party balances in the company.
