Page 169 - Tata_Chemicals_yearly-reports-2020-2021

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

The classification depends on the Company’s • Fair value through other
business model for managing the financial comprehensive income (‘FVTOCI’)
assets and the contractual terms of the cash Assets that are held for collection of
flows. For assets measured at fair value, gains and contractual cash flows and for selling
losses will either be recorded in the Standalone the financial assets, where the assets’
Statement of Profit and Loss or through OCI. For cash flows represent solely payments
investments in debt instruments, this will depend of principal and interest, are measured
on the business model in which the investment at FVTOCI. Movements in the carrying
is held. For investments in equity instruments, amount are recorded through OCI, except
this will depend on whether the Company has for the recognition of impairment gains
made an irrevocable election at the time of initial or losses, interest revenue and foreign
recognition to account for the equity investment exchange gains or losses which are
at fair value through OCI.
recognised in the Standalone Statement of
The Company reclassifies debt investments when Profit and Loss. When the financial asset is
and only when its business model for managing derecognised, the cumulative gain or loss
those assets changes. previously recognised in OCI is reclassified
from equity to the Standalone Statement
Debt instruments
of Profit and Loss. Interest income from
Measurement these financial assets is included in other
income using the EIR method.
A financial asset or financial liability is initially
measured at fair value plus, for an item not at fair • Fair value through profit or loss
value through profit and loss (FVTPL), transaction (‘FVTPL’)
costs that are directly attributable to its acquisition Assets that do not meet the criteria for
or issue. Transaction costs of financial assets carried amortised cost or FVTOCI are measured at
at fair value through profit or loss are expensed in FVTPL. A gain or loss on a debt investment
the Standalone Statement of Profit and Loss.
(including current investments) that
Subsequent measurement of debt instruments is subsequently measured at FVTPL
depends on the Company’s business model (unhedged) is recognised net in the
for managing the asset and the cash flow Standalone Statement of Profit and Loss
characteristics of the asset. There are three in the period in which it arises. Interest
measurement categories into which the Company income from these financial assets is
classifies its debt instruments: included in other income.
• Amortised cost Equity instruments
Assets that are held for collection of The Company subsequently measures all equity
contractual cash flows, where those investments at fair value, except investment
cash flows represent solely payments in subsidiaries and joint ventures. Where the
of principal and interest, are measured Company’s management has elected to present
at amortised cost. A gain or loss on a fair value gains and losses on equity investments
debt investment (unhedged) that is in OCI, there is no subsequent reclassification
subsequently measured at amortised cost of fair value gains and losses to the Standalone
is recognised in the Standalone Statement Statement of Profit and Loss. When the financial
of Profit and Loss when the asset is asset is derecognised, the cumulative gain or loss
derecognised or impaired. Interest income previously recognised in OCI is reclassified to equity.
from these financial assets is included in Dividends from such investments are recognised
other income using the effective interest in the Standalone Statement of Profit and Loss
rate (‘EIR’) method. within other income when the Company’s right

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