Page 183 - Tata_Chemicals_yearly-reports-2019-20

Integrated report Statutory reportS Financial StatementS
Standalone

PPE acquired and put to use for projects are Intangible assets are measured on initial
capitalised and depreciation thereon is included recognition at cost and subsequently are carried
in the project cost till the project is ready for at cost less accumulated amortisation and
commissioning. accumulated impairment losses, if any.

Depreciation methods, estimated useful lives and The intangible assets with a finite useful life
residual value are amortised using straight line method over
their estimated useful lives. The management’s
Depreciation on PPE (except leasehold estimates of the useful lives for various class of
improvements) is calculated using the straight-line Intangibles are as given below:
method to allocate their cost, net of their residual Asset Useful life
values, over their estimated useful lives. However,
leasehold improvements are depreciated on a Computer software 5 years
straight-line method over the shorter of their Other intangible assets 4- 20 years
respective useful lives or the tenure of the lease
arrangement. Freehold land is not depreciated. The estimated useful life is reviewed annually by
the management.
Schedule II to the Act prescribes the useful lives for
various class of assets. For certain class of assets, Gains or losses arising from the retirement or
based on technical evaluation and assessment, disposal of an intangible asset are determined
Management believes that the useful lives as the difference between the net disposal
adopted by it reflect the periods over which these proceeds and the carrying amount of the asset
assets are expected to be used. Accordingly for and recognised as income or expense in the
those assets, the useful lives estimated by the Standalone Statement of Profit and Loss.
management are different from those prescribed
in the Schedule. Management’s estimates of the 2.7 Capital work-in-progress (‘CWIP’) and
useful lives for various class of PPE are as given intangible assets under development
below: Projects under commissioning and other CWIP/
Asset Useful life intangible assets under development are carried
Salt Works, Water works, Reservoirs 1-30 years at cost, comprising direct cost, related incidental
and Pans expenses and attributable borrowing cost.
Plant and Machinery 1-60 years Subsequent expenditures relating to property,
Traction Lines and Railway Sidings 15 years plant and equipment are capitalised only when it is
Factory Buildings 5-60 years probable that future economic benefit associated
Other Buildings 5-60 years with these will flow to the Company and the cost
Furniture and Fittings and Office 1-10 years of the item can be measured reliably.
Equipment (including Computers
and Data Processing Equipment) Advances given to acquire property, plant and
Vehicles 4-10 years equipment are recorded as non-current assets and
subsequently transferred to CWIP on acquisition of
useful lives and residual values of assets are related assets.
reviewed at the end of each reporting period.
2.8 Investment property
Losses arising from the retirement of, and gains or Investment properties are land and buildings that
losses arising from disposal/adjustments of PPE are held for long term lease rental yields and/ or
are recognised in the Standalone Statement of for capital appreciation. Investment properties are
Profit and Loss. initially recognised at cost including transaction
costs. Subsequently investment properties
2.6 Intangible assets comprising buildings are carried at cost less
Intangible assets comprise software licenses and accumulated depreciation and accumulated
rights to use railway wagon. impairment losses, if any.

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