Page 204 - Tata_Chemicals_yearly-reports-2017-18

resulting gain or loss, if any, is recognised in profit or All other repair and maintenance costs, including
loss. Amounts arising from interests in the acquiree regular servicing, are recognised in the Consolidated
prior to the acquisition date that have previously Statement of Profit and Loss as incurred. When a
been recognised in other comprehensive income replacement occurs, the carrying value of the replaced
are reclassified to profit or loss where such treatment part is de-recognised. Where an item of property, plant
would be appropriate if that interest were disposed and equipment comprises major components having
off. different useful lives, these components are accounted
for as separate items.
If the initial accounting for a business combination is
incomplete by the end of the reporting period in which PPE acquired and put to use for projects are capitalised
the combination occurs, the Group reports provisional and depreciation thereon is included in the project
amount for the items for which the accounting is cost till the project is ready for commissioning.
incomplete. Those provisional amount are adjusted
Depreciation methods, estimated useful lives and
during the measurement period, or additional assets
residual value
or liabilities are recognised, to reflect new information
obtained about facts and circumstances that existed Depreciation on PPE (except leasehold
at the acquisition date that, if known, would have improvements and PPE acquired under finance
affected the amount recognised at that date. lease) is calculated using the straight-line method
to allocate their cost, net of their residual values,
2.8 Changes in the proportion held by NCI
over their estimated useful lives. However, leasehold
Changes in the proportion of the equity held by improvements and PPE acquired under finance lease
NCI are accounted for as equity transactions. The are depreciated on a straight-line method over the
carrying amount of the controlling interests and NCI shorter of their respective useful lives or the tenure
are adjusted to reflect the changes in their relative of the lease arrangement. Freehold land is not
interests in the subsidiaries. Any difference between depreciated.
the amount by which the NCI are adjusted and the
Schedule II to the Companies Act 2013 prescribes the
fair value of the consideration paid or received is
useful lives for various class of assets. For certain class of
recognised directly in equity and attributed to owners
assets, based on technical evaluation and assessment,
of the Group.
Management believes that, the useful lives adopted
2.9 Property, plant and equipment by it reflects the periods over which these assets are
expected to be used. Accordingly for those assets, the
An item of property, plant and equipment is recognised
useful lives estimated by the management are different
as an asset if it is probable that the future economic
from those prescribed in the Schedule. Management’s
benefits associated with the item will flow to the
estimates of the useful lives for various class of fixed
Company and its cost can be measured reliably. This
assets are as given below:
recognition principle is applied to the costs incurred
initially to acquire an item of property, plant and
Asset Useful life
equipment and also to costs incurred subsequently to
Salt Works, Reservoirs and Pans
add to, replace part of, or service it and subsequently 1-30 years
carried at cost less accumulated depreciation and Plant and Machinery**
1-60 years
accumulated impairment losses, if any.
Traction Lines and Railway Sidings
15 years
The cost of PPE includes interest on borrowings Factory Buildings
directly attributable to the acquisition, construction 5-60 years
Other Buildings
or production of a qualifying asset. A qualifying asset 5-60 years
is an asset that necessarily takes a substantial period Water Works 15 years
of time to be made ready for its intended use or sale.
Furniture and Fittings and Office
Borrowing costs and other directly attributable cost
Equipment (including Computers and
are added to the cost of those assets until such time as
Data Processing Equipment) 1-10 years
the assets are substantially ready for their intended use,
Vehicles
which generally coincides with the commissioning 4-10 years
date of those assets. Mines and Quarries** 140 years
The present value of the expected cost for the ** Mines and quarries and certain plant and machinery
decommissioning of an asset after its use is included which are in relation to the USA subsidiaries mine are
in the cost of the respective asset if the recognition depreciated using the units-of-production method.
criteria for a provision is met. Approximately 3% (previous year 4%) of plant and
machinery and 100% (previous year 100%) of mines
Machinery spares that meet the definition of PPE are
and quarries are depreciated using the units-of-
capitalised and depreciated over the useful life of the
production method.
principal item of asset.
202 Annual Report 2017-18