Page 264 - Tata_Chemicals_yearly-reports-2019-20

are not allocable to segments on a reasonable basis have expects, at the end of the reporting period, to cover or
been included under ‘unallocated revenue / expenses / settle the carrying value of its assets and liabilities.
assets / liabilities’.
deferred tax assets and liabilities are offset to the extent
2.26 Income tax that they relate to taxes levied by the same tax authority
and there are legally enforceable rights to set off current
tax expense for the year comprises current and deferred tax assets and current tax liabilities within that jurisdiction.
tax. the tax currently payable is based on taxable profit for
the year. taxable profit differs from net profit as reported Current and deferred tax are recognised as an expense or
in the Consolidated Statement of profit and loss because income in the statement of Consolidated Statement of
it excludes items of income or expense that are taxable or profit and loss, except when they relate to items credited
deductible in other years and it further excludes items that or debited either in other comprehensive income or
are never taxable or deductible. the group’s liability for directly in equity, in which case the tax is also recognised
current tax is calculated using tax rates and tax laws that in oCI or directly in equity.
have been enacted or substantively enacted by the end of
the reporting period. deferred tax assets include a credit for the Minimum
alternate tax (‘Mat’) paid in accordance with the tax
Current tax assets and current tax liabilities are offset when laws, which is likely to give future economic benefits in
there is a legally enforceable right to set off the recognised the form of availability of set off against future income
amounts and there is an intention to realise the asset or to tax liability. Mat asset is recognised as deferred tax assets
settle the liability on a net basis. in the Consolidated Balance Sheet when the asset can
be measured reliably, and it is probable that the future
deferred tax is the tax expected to be payable or economic benefit associated with the asset will be realised.
recoverable on differences between the carrying values
of assets and liabilities in the Consolidated Financial 2.27 Provisions and contingencies
Statements and the corresponding tax bases used in the a provision is recognised when the group has a present
computation of taxable profit and is accounted for using obligation as a result of past events and it is probable
the Balance Sheet method. deferred tax liabilities are that an outflow of resources will be required to settle the
generally recognised for all taxable temporary differences obligation, in respect of which a reliable estimate of the
arising between the tax base of assets and liabilities and amount can be made. provisions are determined based
their carrying amount, except when the deferred income on best estimate required to settle the obligation at the
tax arises from the initial recognition of an asset or liability Balance Sheet date. When a provision is measured using
in a transaction that is not a business combination and the cash flows estimated to settle the present obligation,
affects neither accounting nor taxable profit or loss at the its carrying amount is the present value of those cash
time of the transaction. In contrast, deferred tax assets flows (when the effect of the time value of the money is
are only recognised to the extent that it is probable that material). the increase in the provisions due to passage
future taxable profits will be available against which the of time is recognised as interest expense. provisions are
temporary differences can be utilised. reviewed as at each reporting date and adjusted to reflect
the current estimate.
the carrying value of deferred tax assets is reviewed at the
end of each reporting period and reduced to the extent that Contingent liabilities are disclosed when there is a possible
it is no longer probable that sufficient taxable profits will be obligation arising from past events, the existence of which
available to allow all or part of the asset to be recovered. will be confirmed only by the occurrence or non-occurrence
of one or more uncertain future events not wholly within
the control of the group or a present obligation that arises
deferred tax is calculated at the tax rates that are expected from past events where it is either not probable that an
to apply in the period when the liability is settled or the outflow of resources will be required to settle or a reliable
asset is realised based on the tax rates and tax laws that estimate of the amount cannot be made.
have been enacted or substantially enacted by the end
of the reporting period. the measurement of deferred Contingent assets are not disclosed in the Consolidated
tax liabilities and assets reflects the tax consequences Financial Statements unless an inflow of economic
that would follow from the manner in which the group benefits is probable.

262 I Integrated annual report 2019-20