Page 188 - Tata_Chemicals_yearly-reports-2019-20

The Company reviews its carrying value of Revenue from the sale of goods is recognised at
investment in subsidiaries and goodwill carried at the point in time when control is transferred to the
cost (net of impairment, if any) annually, or more customer which is usually on dispatch / delivery of
frequently when there is indication for impairment. goods, based on contracts with the customers.
If the recoverable amount is less than its carrying
amount, the impairment loss is accounted for in Revenue is measured based on the transaction
the Standalone Statement of Profit and Loss. price, which is the consideration, adjusted for
volume discounts, price concessions, incentives,
PPE, CWIP and intangible assets and returns, if any, as specified in the contracts with
The carrying values of assets / cash generating units the customers. Revenue excludes taxes collected
(‘CGu’) at each Balance Sheet date are reviewed to from customers on behalf of the government.
determine whether there is any indication that an Accruals for discounts/incentives and returns are
asset may be impaired. If any indication of such estimated (using the most likely method) based on
impairment exists, the recoverable amount of such accumulated experience and underlying schemes
assets / CGu is estimated and in case the carrying and agreements with customers. Due to the short
amount of these assets exceeds their recoverable nature of credit period given to customers, there is
amount, an impairment loss is recognised in the no financing component in the contract.
Standalone Statement of Profit and Loss. The
recoverable amount is the higher of the net selling 2.14.2 Interest income
price and their value in use. Value in use is arrived For all debt instruments measured either at
at by discounting the future cash flows to their amortised cost or at FVTOCI, interest income is
present value based on an appropriate discount recorded using the EIR method.
factor. Assessment is also done at each Balance
Sheet date as to whether there is indication that 2.14.3 Dividend income
an impairment loss recognised for an asset in prior Dividend income is accounted for when Company’s
accounting periods no longer exists or may have right to receive the income is established.
decreased, consequent to which such reversal of
impairment loss is recognised in the Standalone 2.14.4 Insurance claims
Statement of Profit and Loss. Insurance claims are accounted for on the basis of
claims admitted / expected to be admitted and to
2.13 Inventories the extent that there is no uncertainty in receiving
Inventories are valued at lower of cost (on weighted the claims.
average basis) and net realisable value after
providing for obsolescence and other losses, where 2.15 Leases
considered necessary. Cost includes all charges in The Company has adopted Ind AS 116 effective
bringing the goods to their present location and from April 1, 2019 using modified retrospective
condition, including other levies, transit insurance approach. For the purpose of preparation of
and receiving charges. Work-in-progress and Standalone Financial Information, management
finished goods include appropriate proportion of has evaluated the impact of change in accounting
overheads and, where applicable, taxes and duties. policies required due to adoption of lnd AS 116
Net realisable value is the estimated selling price in for year ended March 31, 2020. Accordingly,
the ordinary course of business, less the estimated the Company has not restated comparative
costs of completion and the estimated costs information, instead, the cumulative effect of
necessary to make the sale. initially applying this standard has been recognised
2.14 Revenue recognition as an adjustment to the opening balance of
retained earnings as on April 1, 2019.
2.14.1 Sale of goods
Revenue is recognised upon transfer of control of The Company assesses whether a contract
promised goods to customers in an amount that contains a lease, at inception of a contract. A
reflects the consideration which the Company contract is, or contains, a lease if the contract
expects to receive in exchange for those goods. conveys the right to control the use of an

186 I INTEGRATED ANNuAL REPORT 2019-20