Page 240 - Tata_Chemicals_yearly-reports-2020-2021
P. 240
Integrated Annual Report 2020-21
an item not at fair value through profit • Fair value through profit or loss
and loss (FVTPL), transaction costs that (“FVTPL”)
are directly attributable to its acquisition Assets that do not meet the criteria for
or issue. Transaction costs of financial amortised cost or FVTOCI are measured at
assets carried at fair value through profit FVTPL. A gain or loss on a debt investment
or loss are expensed in the Consolidated (including current investments) that
Statement of Profit and Loss. is subsequently measured at FVTPL
Subsequent measurement of debt (unhedged) is recognised net in the
instruments depends on the Group’s Consolidated Statement of Profit and Loss
business model for managing the asset in the period in which it arises. Interest
and the cash flow characteristics of the income from these financial assets is
asset. There are three measurement included in other income.
categories into which the Group classifies Equity instruments
its debt instruments:
The Group subsequently measures all equity
• Amortised cost investments at fair value. Where the Group’s
Assets that are held for collection of management has elected to present fair value
contractual cash flows, where those gains and losses on equity investments in OCI, there
cash flows represent solely payments is no subsequent reclassification of fair value gains
of principal and interest, are measured and losses to the Consolidated Statement of Profit
at amortised cost. A gain or loss on a and Loss. When the financial asset is derecognised,
debt investment (unhedged) that is the cumulative gain or loss previously recognised
subsequently measured at amortised in OCI is reclassified to equity. Dividends from such
cost is recognised in the Consolidated investments are recognised in the Consolidated
Statement of Profit and Loss when the Statement of Profit and Loss within other income
asset is derecognised or impaired. Interest when the Group’s right to receive payments is
income from these financial assets is established. Impairment losses (and reversal
included in other income using the of impairment losses) on equity investments
effective interest rate (‘EIR’) method. measured at FVTOCI are not reported separately
from other changes in fair value.
• Fair value through other comprehensive
income (‘FVTOCI’) Cash and cash equivalents
Assets that are held for collection of The Group considers all highly liquid financial
contractual cash flows and for selling instruments, which are readily convertible into
the financial assets, where the asset’s known amounts of cash, that are subject to an
cash flows represent solely payments insignificant risk of change in value with a maturity
of principal and interest, are measured within three months or less from the date of
at FVTOCI. Movements in the carrying purchase, to be cash equivalents. Cash and cash
amount are recorded through OCI, except equivalents consist of balances with banks which
for the recognition of impairment gains are unrestricted for withdrawal and usage.
or losses, interest revenue and foreign Derecognition of financial assets
exchange gains and losses which are A financial asset is derecognised only when the
recognised in the Consolidated Statement Group
of Profit and Loss. When the financial
asset is derecognised, the cumulative • has transferred the rights to receive cash
gain or loss previously recognised in flows from the financial asset; or
OCI is reclassified from equity to the • retains the contractual rights to receive
Consolidated Statement of Profit and Loss. the cash flows of the financial asset, but
Interest income from these financial assets assumes a contractual obligation to pay
is included in other income using the EIR. the cash flows to one or more recipients.
238
