Page 279 - Tata_Chemicals_yearly-reports-2021-22

01 INTEGRATED 73 STATUTORY 178 FINANCIAL
STATEMENTS
REPORTS
REPORT
Consolidated

may be impaired. For the purpose of impairment customer which is usually on dispatch / delivery of
testing, the Goodwill is allocated to a CGU or Group goods, based on contracts with the customers.
of CGUs, which are expected to benefit from the Revenue is measured based on the transaction
synergies arising from the business combination price, which is the consideration, adjusted for
in which the said Goodwill arose.
volume discounts, price concessions, incentives,
If the estimated recoverable amount of the CGU and returns, if any, as specified in the contracts with
including the Goodwill is less than its carrying the customers. Revenue excludes taxes collected
amount, the impairment loss is allocated first from customers on behalf of the government.
to reduce the carrying amount of any goodwill Accruals for discounts/incentives and returns are
allocated to the CGU and then to the other assets estimated (using the most likely method) based on
of the CGU on a pro-rata basis of the carrying accumulated experience and underlying schemes
amount of each asset in the unit. and agreements with customers. Due to the
short nature of credit period given to customers,
An impairment loss in respect of goodwill is not there is no financing component in the contract.
subsequently reversed, In respect of other assets Any amounts received where the performance
for which impairment loss has been recognised in obligation has not been met are held as deferred
prior periods, the Group reviews at each reporting income.
date whether there is any indication that the loss
has decreased or no longer exists. An impairment 2.18.2 Interest income
loss is reversed if there has been a change in For all debt instruments measured either at
the estimated use to determine the recoverable amortised cost or at FVTOCI, interest income is
amount. Such a reversal is made only to the extent recorded using the EIR Method.
that the asset’s carrying amount does not exceed
the carrying amount that would have been 2.18.3 Dividend income
determined, net of depreciation or amortisation, if Dividend income is accounted for when Group’s
no impairment loss had been recognised. right to receive the income is established.
2.17 Inventories 2.18.4 Insurance claims
Inventories are valued at lower of cost (on Insurance claims are accounted for on the basis of
weighted average basis) and net realisable claims admitted and to the extent that there is no
value after providing for obsolescence and uncertainty in receiving the claims.
other losses, where considered necessary on an
item-by-item basis. Cost includes all charges in 2.19 Leases
bringing the goods to their present location and The Group assesses whether a contract contains
condition, including other levies, transit insurance a lease, at inception of a contract. A contract is, or
and receiving charges. Work-in-progress and contains, a lease if the contract conveys the right
finished goods include appropriate proportion to control the use of an identified asset for a define
of overheads and, where applicable, taxes and period of time in exchange for consideration. To
duties. Net realisable value is the estimated selling assess whether a contract conveys the right to
price in the ordinary course of business, less the control the use of an identified assets, the Group
estimated costs of completion and the estimated assesses whether: (i) the contact involves the use
costs necessary to make the sale.
of an identified asset (ii) the Group has substantially
2.18 Revenue recognition all of the economic benefits from use of the asset
2.18.1 Sale of goods through the period of the lease and (iii) the Group
has the right to direct the use of the asset.
Revenue is recognised upon transfer of control As a lessee, The Group recognises a right-
of promised goods to customers in an amount of-use asset and a lease liability at the lease
that reflects the consideration which the Group commencement date. The right¬-of-use asset
expects to receive in exchange for those goods.
is initially measured at cost, which comprises
Revenue from the sale of goods is recognised at the initial amount of the lease liability adjusted
the point in time when control is transferred to the for any lease payments made at or before the

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