Page 236 - Tata_Chemicals_yearly-reports-2020-2021

Integrated Annual Report 2020-21

that includes a foreign operation of proportionate share of the acquiree’s identifiable
which the retained interest becomes a net assets. The choice of measurement basis is
financial asset), the exchange differences made on an acquisition-by-acquisition basis.
accumulated in equity in respect of that When the consideration transferred by the Group
operation attributable to the owners of the in a business combination includes assets or
Group are reclassified to the Consolidated liabilities resulting in a contingent consideration
Statement of Profit and Loss as part of the arrangement, such contingent consideration, on
gain or loss on disposal.
the acquisition date, is measured at fair value and
In case of a partial disposal of interests included as a part of the consideration transferred
in a subsidiary that includes a foreign in a business combination. Changes in the fair
operation that does not result in the value of the contingent consideration that qualify
Group losing control over the subsidiary, as measurement period adjustments, are adjusted
the proportionate share of accumulated retrospectively, with corresponding adjustments
exchange differences are re-attributed against goodwill or capital reserve as the case may
to NCI and are not recognised in the be.
Consolidated Statement of Profit and Measurement period adjustments are adjustments
Loss. For all other partial disposal (i.e. that arise from additional information during the
partial disposals of joint arrangements ‘measurement period’ (which cannot exceed one
that do not result in the Group losing year from the acquisition date) about facts and
significant influence or joint control), the circumstances that existed at the acquisition date.
proportionate share of the accumulated
exchange differences is reclassified to the The subsequent accounting for changes in the fair
Consolidated Statement of Profit and Loss. value of the contingent consideration that do not
qualify as the measurement period adjustments
2.7 Business combinations depends on how the contingent consideration
The Group accounts for its business combinations is classified. Contingent consideration that is
under acquisition method of accounting. classified as equity is not remeasured at subsequent
Acquisition related costs are recognised in reporting dates and its subsequent settlement
the Consolidated Statement of Profit and Loss is accounted for within equity. Contingent
as incurred. The acquiree’s identifiable assets, consideration that is classified as an asset or a
liabilities and contingent liabilities that meet the liability is remeasured at fair value at subsequent
condition for recognition are recognised at their reporting dates with the corresponding gain or
fair values at the acquisition date except deferred loss being recognised in profit or loss.
tax assets or liabilities, and assets or liabilities When a business combination is achieved in
related to employee benefit arrangements, which stages, the Group’s previously held equity interest
are recognised and measured in accordance with in the acquiree is remeasured to its acquisition-
Ind AS 12- Income taxes and Ind AS 19-Employee date fair value and the resulting gain or loss, if any,
benefits, respectively. is recognised in profit or loss. Amounts arising from
Goodwill is measured as the excess of the sum of the interests in the acquiree prior to the acquisition
consideration transferred, the amount of NCI in the date that have previously been recognised in other
aquiree, and the fair value of acquirer’s previously comprehensive income are reclassified to profit or
held equity instrument in the aquiree (if any) over loss where such treatment would be appropriate if
the net of acquisition date fair value of identifiable that interest were disposed off.
assets acquired and liabilities assumed. Where the If the initial accounting for a business combination
fair value of identifiable assets and liabilities exceed is incomplete by the end of the reporting period
the cost of acquisition, after reassessing the fair in which the combination occurs, the Group
values of the net assets and contingent liabilities, reports provisional amount for the items for which
the excess is recognised as capital reserve. the accounting is incomplete. Those provisional

The interest of non-controlling shareholders is amount are adjusted during the measurement
initially measured either at fair value or at the NCI’s period, or additional assets or liabilities are

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