Page 255 - Tata_Chemicals_yearly-reports-2019-20

Integrated report Statutory reportS Financial StatementS
Consolidated

the group and its cost can be measured reliably. these believes that, the useful lives adopted by it reflect the
recognition principles are applied to the costs incurred periods over which these assets are expected to be used.
initially to acquire an item of ppe, to the pre-operative accordingly for those assets, the useful lives estimated by
and trial run costs incurred (net of sales), if any and also the management are different from those prescribed in
to the costs incurred subsequently to add to, replace the Schedule. Management’s estimates of the useful lives
part of, or service it and subsequently carried at cost less for various class of ppe are as given below:
accumulated depreciation and accumulated impairment Asset Useful life
losses, if any.
Salt Works, reservoirs and pans 1-30 years
the cost of ppe includes interest on borrowings directly plant and Machinery** 1-60 years
attributable to the acquisition, construction or production traction lines and railway Sidings 15 years
of a qualifying asset. a qualifying asset is an asset that Factory Buildings 5-60 years
necessarily takes a substantial period of time to be made other Buildings 5-60 years
ready for its intended use or sale. Borrowing costs and Water Works 15 years
other directly attributable cost are added to the cost of
those assets until such time as the assets are substantially Furniture and Fittings and office 1-10 years
ready for their intended use, which generally coincides equipment (including Computers and
with the commissioning date of those assets. data processing equipment)
Vehicles 4-10 years
the present value of the expected cost for the Mines and Quarries** 140 years
decommissioning of an asset after its use is included in the ** Mines and quarries and certain plant and machinery
cost of the respective asset if the recognition criteria for a which are in relation to the uSa subsidiaries mine are
provision is met.
depreciated using the units-of-production method.
Machinery spares that meet the definition of ppe are approximately 2% (previous year 3%) of plant and
capitalised and depreciated over the useful life of the machinery and 100% (previous year 100%) of mines and
principal item of an asset. quarries are depreciated using the units-of-production
method.
all other repair and maintenance costs, including regular
servicing, are recognised in the Consolidated Statement useful lives and residual values of assets are reviewed at
of profit and loss as incurred. When a replacement occurs, the end of each reporting period.
the carrying value of the replaced part is de-recognised.
Where an item of property, plant and equipment losses arising from the retirement of, and gains or losses
comprises major components having different useful lives, arising from disposal/adjustments of ppe are recognised in
these components are accounted for as separate items. the Consolidated Statement of profit and loss.
ppe acquired and put to use for projects are capitalised 2.10 Intangible assets
and depreciation thereon is included in the project cost till Goodwill
the project is ready for commissioning.
goodwill represents the cost of the acquired businesses
depreciation methods, estimated useful lives and residual in excess of the fair value of identifiable tangible and
value intangible net assets purchased. goodwill is not amortised;
however it is tested annually for impairment and carried at
depreciation on ppe (except leasehold improvements) cost less accumulated impairment losses, if any. the gains
is calculated using the straight-line method to allocate / (losses) on the disposal of an entity include the carrying
their cost, net of their residual values, over their estimated amount of goodwill relating to the entity disposed.
useful lives. However, leasehold improvements are
depreciated on a straight-line method over the shorter Other Intangible assets
of their respective useful lives or the tenure of the lease
arrangement. Freehold land is not depreciated. Computer software, technical knowhow, product
registration, contractual rights, rights to use railway
Schedule II to the act prescribes the useful lives for wagons and mining rights of similar nature are initially
various class of assets. For certain class of assets, based recognised at cost. the intangible assets acquired in a
on technical evaluation and assessment, Management business combination are measured at their fair value as

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