Page 203 - Tata_Chemicals_yearly-reports-2021-22

01 INTEGRATED 73 STATUTORY 178 FINANCIAL
REPORT
REPORTS
STATEMENTS
Standalone

The classification depends on the Company’s • Fair value through Other
business model for managing the financial assets Comprehensive Income (‘FVTOCI’)
and the contractual terms of the Cash Flows. Assets that are held for collection of
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
A financial asset or financial liability is initially income using the EIR method.
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
or issue. Transaction costs of financial assets carried Assets that do not meet the criteria for
at fair value through profit or loss are expensed in amortised cost or FVTOCI are measured at
the Standalone Statement of Profit and Loss. FVTPL. A gain or loss on a debt investment
(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
contractual Cash Flows, where those The Company subsequently measures all equity
Cash Flows represent solely payments investments at fair value, except investment in
of principal and interest, are measured subsidiaries and joint ventures which are measured
at amortised cost. A gain or loss on a at cost. Where the Company’s management has
debt investment (unhedged) that is elected to present fair value gains and losses on
subsequently measured at amortised cost equity investments in OCI, there is no subsequent
is recognised in the Standalone Statement reclassification of fair value gains and losses to
of Profit and Loss when the asset is the Standalone Statement of Profit and Loss.
derecognised or impaired. Interest income When the financial asset is derecognised, the
from these financial assets is included in cumulative gain or loss previously recognised in
other income using the effective interest OCI is reclassified to equity. Dividends from such
rate (‘EIR’) method. investments are recognised in the Standalone

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