Page 273 - Tata_Chemicals_yearly-reports-2021-22

01 INTEGRATED 73 STATUTORY 178 FINANCIAL
STATEMENTS
REPORT
REPORTS
Consolidated

relative interests in the subsidiaries. Any difference Depreciation methods, estimated useful lives
between the amount by which the NCI are and residual value
adjusted and the fair value of the consideration Depreciation on PPE (except leasehold
paid or received is recognised directly in equity improvements) is calculated using the straight-line
and attributed to owners of the Group. method to allocate their cost, net of their residual

2.9 Property, plant and equipment values, over their estimated useful lives. However,
leasehold improvements are depreciated on a
An item of property, plant and equipment (‘PPE’) straight-line method over the shorter of their
is recognised as an asset if it is probable that the respective useful lives or the tenure of the lease
future economic benefits associated with the arrangement. Freehold land is not depreciated.
item will flow to the Group and its cost can be
measured reliably. These recognition principles Schedule II to the Act prescribes the useful lives for
are applied to the costs incurred initially to acquire various class of assets. For certain class of assets,
an item of PPE, to the pre-operative and trial run based on technical evaluation and assessment,
costs incurred (net of sales), if any and also to the Management believes that, the useful lives
costs incurred subsequently to add to, replace part adopted by it reflect the periods over which these
of, or service it and subsequently carried at cost assets are expected to be used. Accordingly for
less accumulated depreciation and accumulated those assets, the useful lives estimated by the
impairment losses, if any. management are different from those prescribed
in the Schedule. Management’s estimates of the
The cost of PPE includes interest on borrowings useful lives for various class of PPE are as given
directly attributable to the acquisition, below:
construction or production of a qualifying asset. A
qualifying asset is an asset that necessarily takes Asset Useful life
Salt Works, Water Works, Reservoirs 1-30 years
a substantial period of time to be made ready for and Pans
its intended use or sale. Borrowing costs and other Plant and Machinery** 1-60 years
directly attributable cost are added to the cost Traction Lines and Railway Sidings 15 years
of those assets until such time as the assets are Factory Buildings 5-60 years
substantially ready for their intended use, which Other Buildings 5-60 years
generally coincides with the commissioning date Water Works 15 years
of those assets. Furniture and Fittings and Office 1-10 years
The present value of the expected cost for the Equipment (including Computers
decommissioning of an asset after its use is and Data Processing Equipment)
included in the cost of the respective asset if the Vehicles 4-10 years
recognition criteria for a provision is met. Mines and Quarries** 140 years
** Mines and quarries and certain plant and machinery
Machinery spares that meet the definition of PPE which are in relation to the USA subsidiaries mine are
are capitalised and depreciated over the useful life depreciated using the units-of-production method.
of the principal item of an asset. Approximately 1% (previous year 1%) of plant and
machinery and 100% (previous year 100%) of mines and
All other repair and maintenance costs, quarries are depreciated using the units-of-production
including regular servicing, are recognised in method.
the Consolidated Statement of Profit and Loss as Useful lives and residual values of assets are
incurred. When a replacement occurs, the carrying reviewed at the end of each reporting period.
value of the replaced part is de-recognised. Losses arising from the retirement of, and gains or
Where an item of property, plant and equipment losses arising from disposal/adjustments of PPE
comprises major components having different are recognised in the Consolidated Statement of
useful lives, these components are accounted for Profit and Loss.
as separate items.
2.10 Intangible assets
PPE acquired and put to use for projects are
capitalised and depreciation thereon is included Goodwill
in the project cost till the project is ready for Goodwill represents the cost of the acquired
commissioning. businesses in excess of the fair value of identifiable

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