Page 167 - Tata_Chemicals_yearly-reports-2020-2021

Integrated Report Statutory Reports Financial Statements
1-59 60-146 Standalone

Depreciation methods, estimated useful lives The intangible assets with a finite useful life
and 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
values, over their estimated useful lives. However, Asset Useful life
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 2.7 Capital work-in-progress (‘CWIP’) and
in the Schedule. Management’s estimates of the intangible assets under development
useful lives for various class of PPE are as given
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
expenses and attributable borrowing cost.
and Pans
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 Advances given to acquire property, plant and
and Data Processing Equipment) equipment are recorded as non-current assets and
Vehicles 4-10 years 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
losses arising from disposal/adjustments of PPE Investment properties are land and buildings that
are recognised in the Standalone Statement of are held for long term lease rental yields and/ or
Profit and Loss. for capital appreciation. Investment properties are
initially recognised at cost including transaction
2.6 Intangible assets costs. Subsequently investment properties
comprising buildings are carried at cost less
Intangible assets comprise software licenses,
product registration fees and rights to use railway accumulated depreciation and accumulated
wagon. impairment losses, if any.
Intangible assets are measured on initial Depreciation on buildings is provided over the
recognition at cost and subsequently are carried estimated useful lives as specified in note 2.5
at cost less accumulated amortisation and above. The residual values, estimated useful lives
accumulated impairment losses, if any. and depreciation method of investment properties

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