Page 272 - Tata_Chemicals_yearly-reports-2021-22

Integrated Annual Report 2021-22

operation that does not result in the in a business combination. Changes in the fair
Group losing control over the subsidiary, value of the contingent consideration that qualify
the proportionate share of accumulated as measurement period adjustments, are adjusted
exchange differences are re-attributed retrospectively, with corresponding adjustments
to NCI and are not recognised in the against goodwill or capital reserve as the case may
Consolidated Statement of Profit and be.
Loss. For all other partial disposal (i.e. Measurement period adjustments are adjustments
partial disposals of joint arrangements that arise from additional information during the
that do not result in the Group losing ‘measurement period’ (which cannot exceed one
significant influence or joint control), the year from the acquisition date) about facts and
proportionate share of the accumulated circumstances that existed at the acquisition date.
exchange differences is reclassified to the
Consolidated Statement of Profit and Loss. The subsequent accounting for changes in the fair
value of the contingent consideration that do not
2.7 Business combinations qualify as the measurement period adjustments
The Group accounts for its business combinations depends on how the contingent consideration
under acquisition method of accounting. is classified. Contingent consideration that is
Acquisition related costs are recognised in classified as equity is not remeasured at subsequent
the Consolidated Statement of Profit and Loss reporting dates and its subsequent settlement
as incurred. The acquiree’s identifiable assets, is accounted for within equity. Contingent
liabilities and contingent liabilities that meet the consideration that is classified as an asset or a
condition for recognition are recognised at their liability is remeasured at fair value at subsequent
fair values at the acquisition date except deferred reporting dates with the corresponding gain or
tax assets or liabilities, and assets or liabilities loss being recognised in profit or loss.
related to employee benefit arrangements, which When a business combination is achieved in
are recognised and measured in accordance with stages, the Group’s previously held equity interest
Ind AS 12- Income taxes and Ind AS 19-Employee in the acquiree is remeasured to its acquisition-
benefits, respectively. date fair value and the resulting gain or loss, if any,
Goodwill is measured as the excess of the sum is recognised in profit or loss. Amounts arising from
of the consideration transferred, the amount of interests in the acquiree prior to the acquisition
NCI in the aquiree, and the fair value of acquirer’s date that have previously been recognised in other
previously held equity instrument in the aquiree comprehensive income are reclassified to profit or
(if any) over the net of acquisition date fair value loss where such treatment would be appropriate if
of identifiable assets acquired and liabilities that interest were disposed off.
assumed. Where the fair value of identifiable assets If the initial accounting for a business combination
and liabilities exceed the cost of acquisition, after is incomplete by the end of the reporting period
reassessing the fair values of the net assets and in which the combination occurs, the Group
contingent liabilities, the excess is recognised as reports provisional amount for the items for which
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
proportionate share of the acquiree’s identifiable recognised, to reflect new information obtained
net assets. The choice of measurement basis is about facts and circumstances that existed at
made on an acquisition-by-acquisition basis. the acquisition date that, if known, would have
affected the amount recognised at that date.
When the consideration transferred by the Group
in a business combination includes assets or 2.8 Changes in the proportion held by NCI
liabilities resulting in a contingent consideration Changes in the proportion of the equity held by
arrangement, such contingent consideration, on NCI are accounted for as equity transactions. The
the acquisition date, is measured at fair value and carrying amount of the controlling interests and
included as a part of the consideration transferred NCI are adjusted to reflect the changes in their

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