Page 210 - Tata_Chemicals_yearly-reports-2021-22

Integrated Annual Report 2021-22

Current and deferred tax are recognised as an schemes approved by the regulators, where all the
expense or income in the Standalone Statement assets and liabilities of transferor companies would
of Profit and Loss, except when they relate to items be recorded at the book value as at the Appointed
credited or debited either in Other Comprehensive date.
Income or directly in equity, in which case the tax
is also recognised in OCI or directly in equity. 3. Recent Indian Accounting Standard (Ind AS)
pronouncements which are not yet effective
2.22 Provisions and contingencies
On 23 March 2022, the Ministry of Corporate Affairs (“MCA”)
A provision is recognised when the Company has through notifications, amended the existing Ind AS. The
a present obligation as a result of past events and same shall come into force from annual reporting period
it is probable that an outflow of resources will beginning on or after April 1 2022. Key Amendments
be required to settle the obligation, in respect relating to the same where financial statements are
of which a reliable estimate of the amount can required to comply with Companies (Indian Accounting
be made. Provisions are determined based on Standards) Rules 2015 are:
best estimate required to settle the obligation
at the balance sheet date. When a provision is - Ind AS 16 Property, Plant and Equipment – For
measured using the Cash Flows estimated to items produced during testing/trial phase,
settle the present obligation, its carrying amount clarification added that revenue generated out of
is the present value of those Cash Flows (when the the same shall not be recognised in the Standalone
effect of the time value of the money is material). Statement of Profit and Loss and considered as
The increase in the provisions due to passage of part of cost of PPE.
time is recognised as interest expense. - Ind AS 37 Provisions, Contingent Liabilities &
Contingent Assets – Guidance on what constitutes
Provisions are reviewed at each balance sheet
date and adjusted to reflect the current best cost of fulfilling contracts (to determine whether
estimate. If it is no longer probable that the the contract is onerous or not) is included.
outflow of resources would be required to settle - Ind AS 41 Agriculture– This aligns the fair value
the obligation, the provision is reversed. measurement in Ind AS 41 with the requirements
Contingent liabilities are disclosed when there is of Ind AS 113 Fair Value Measurement to use
a possible obligation arising from past events, the internally consistent Cash Flows and discount
existence of which will be confirmed only by the rates and enables preparers to determine
occurrence or non-occurrence of one or more whether to use pre-tax or post-tax Cash Flows and
uncertain future events not wholly within the discount rates for the most appropriate fair value
control of the Company or a present obligation measurement.
that arises from past events where it is either - Ind AS 101 – First time Adoption of Ind AS –
not probable that an outflow of resources will Measurement of Foreign Currency Translation
be required to settle or a reliable estimate of the Difference in case of subsidiary/associate/ JV’s
amount cannot be made. date of transition to Ind AS is subsequent to that of
Parent – FCTR in the books of subsidiary/associate/
Contingent assets are not disclosed in the
Standalone Financial Statements unless an inflow JV can be measured based on Consolidated
of economic benefits is probable. Financial Statements.
- Ind AS 103 – Business Combination – Reference
2.23 Dividend to revised Conceptual Framework. For contingent
Final dividend on shares is recorded as a liability liabilities / levies, clarification is added on how to
on the date of approval by the shareholders and apply the principles for recognition of contingent
interim dividends are recorded as a liability on the liabilities from Ind AS 37. Recognition of contingent
date of declaration by the Company’s Board of assets is not allowed.
Directors. - Ind AS 109 Financial Instruments – The
2.24 Business combinations amendment clarifies which fees an entity includes
The Company accounts for the common control when it applies the ‘10 per cent’ test in assessing
transactions in accordance with the ‘pooling of whether to derecognise a financial liability.
interest’ method prescribed under Ind AS 103 The amendments are extensive and the Company will
- Business Combination for common control evaluate the same to give effect to them as required by
transactions and as per the provisions of respective law.

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