Page 301 - Tata Chemical Annual Report_2022-2023

Integrated Annual Report 2022-23 01-83 84-192 193-365
Integrated Report Statutory Reports Financial Statements
Consolidated

Contingent liabilities are disclosed when there 2.29 Reverse Forfaiting and liability in a transaction that is not a business financial statements. The supporting paragraph in Ind
is a possible obligation arising from past events, Reverse forfaiting is a financing mechanism initiated combination and affects neither accounting nor AS 1 are also amended to clarify that accounting policy
the existence of which will be confirmed only by by the Group under which a supplier sells a receivable taxable profit. For example, this may arise upon information that relates to immaterial transactions,
the occurrence or non-occurrence of one or more due from the Group to a third party, for immediate recognition of a lease liability and the corresponding other events or conditions is immaterial and need
uncertain future events not wholly within the control settlement, As part of the arrangement, the Group right-of-use asset applying Ind AS 116 Leases at the not be disclosed. Accounting policy information
of the Group or a present obligation that arises from benefits from an extended credit period in return commencement date of a lease. The amendments may be material because of the nature of the related
past events where it is either not probable that an for a financing charge. Where this arrangement should be applied to transactions that occur on transactions, other events or conditions, even if the
outflow of resources will be required to settle or a does not result in payment terms significantly in or after the beginning of the earliest comparative amounts are immaterial. However, not all accounting
reliable estimate of the amount cannot be made. excess of normal credit terms, does not result in the period presented. In addition, at the beginning policy information relating to material transactions,
Group paying increased finance charges, does not of the earliest comparative period presented, a other events or conditions is itself material.
Contingent assets are not disclosed in the financial deferred tax asset (provided that sufficient taxable
statements unless an inflow of economic benefits require the Group to provide additional collateral or profit is available) and a deferred tax liability should - Amendments to Ind AS 8 Accounting Policies, Changes
is probable. a guarantee and does not result in the cancellation also be recognised for all deductible and taxable in Accounting Estimates and Errors—Definition of
of the original invoice, the base value of the Invoice
2.27 Emissions Trading Allowances continues to be recognised in trade payables. Where temporary differences associated with leases and Accounting Estimates:
decommissioning obligations.
purchase invoices which have been subject to reverse
At each period-end the Group estimates its forfaiting are outstanding at the balance sheet date, The amendments replace the definition of a
outstanding obligation to surrender allowances under an accrual is made for unpaid financing charges. - Amendments to Ind AS 1 Presentation of Financial change in accounting estimates with a definition
United Kingdom emission trading scheme (“UKETS”). Statements – Disclosure of Accounting Policies: of accounting estimates. Under the new definition,
Where these obligations are already matched by 2.30 Dividend accounting estimates are “monetary amounts in
allowances either held or purchased forward by the The amendments replace all instances of the term financial statements that are subject to measurement
Group, the provisions is calculated using the same Final dividends on shares are recorded as a liability, on ‘significant accounting policies’ with ‘material uncertainty”. The amendments clarify the distinction
cost as the allowances. To the extent that the Group the date of approval by the shareholders and interim accounting policy information’. Accounting policy between changes in accounting estimates and
has obligations to surrender allowances in excess of dividends are recorded as a liability on the date of information is material if, when considered together changes in accounting policies and the correction
allowances held or purchased forward, the provision declaration by the Company’s Board of Directors. with other information included in an entity’s financial of errors. Also, they clarify how entities use
is based on market prices at the balance sheet date. statements, it can reasonably be expected to influence measurement techniques and inputs to develop
3. Recent Indian Accounting Standard (Ind AS) decisions that the primary users of general-purpose accounting estimates.
Under UKETS, for each calander year the Group pronouncements which are not yet effective financial statements make on the basis of those
receives an allocation of free allowances which are New and revised Indian Accounting Standards in issue but
initially recorded at fair value under provisions with not yet effective
a corresponding deferred income balance that is
released to the Consolidated Profit and Loss account Following are the amendments to existing standards (as
on a straight line basis over the calandar year. notified by Ministry of Corporate Affairs (MCA) on March
31, 2023) which are effective for annual periods beginning
2.28 Asset Retirement Obligations after April 1, 2023. The Company intends to adopt these
The Group provides for the expected costs to be standards or amendments from the effective date, as
incurred for the eventual reclamation of properties applicable and relevant. These amendments are not
pursuant to local laws. The Group accounts for its land expected to have a significant impact on the Company's
reclamation liability as an asset retirement obligation, Consolidated Financial Statements. This assessment is
which requires that obligations associated with the based on currently available information and may be
retirement of a tangible long-lived asset be recorded subject to changes arising from further reasonable and
as a liability when those obligations are incurred, supportable information being made available to the
with the amount of the liability initially measured company when it will adopt the respective standards.
at fair value. Upon recognising a liability for an asset
retirement obligation, an entity also capitalizes the - Amendments to Ind AS 12 Income Taxes—Deferred
cost of the reclamation by recognising an increase in Tax related to Assets and Liabilities arising from a
the carrying amount of the related long-lived asset. Single Transaction:
Over time, the liability is accreted to its future value
each period, and the capitalized costs of the related Under the amendments, an entity does not apply the
long-lived assets are depreciated over their estimated initial recognition exemption for transactions that
useful lives. The Group ultimately either settles the give rise to equal taxable and deductible temporary
obligation for its recorded amount or incurs a gain or differences. Equal taxable and deductible temporary
loss upon settlement. differences may arise on initial recognition of an asset

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