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Transition to Ind AS
(continued)
v) Long-term foreign currency monetary items
Ind AS 101 provides an exemption to continue the Accounting Policy option of recognising the exchange
difference on translation of such long-term foreign currency items under IGAAP, para 46A of AS 11 ‘The
Effects of Changes in Foreign Exchange Rates’, provided an alternative accounting treatment to companies
with respect to exchange differences arising on restatement of long-term foreign currency monetary items.
Exchange differences on account of depreciable assets can be added | deducted from the cost of the
depreciable asset, which will be depreciated over the balance life of the asset, can be continued under Ind AS
for items outstanding as on March 31, 2016. The Group has opted to apply this exemption.
vi) Joint ventures
Ind AS 101 provides an exemption for changing from proportionate consolidation to the equity method.
As per the exemption, when changing from proportionate consolidation to the equity method, an entity shall
recognise its investment in the joint venture company at transition date to Ind AS. That initial investment
shall be measured as the aggregate of the carrying amounts of the assets and liabilities that the entity had
previously proportionately consolidated, including any goodwill arising from acquisition. The balance of the
investment in joint venture company at the date of transition to Ind AS, determined in accordance with the
above, is regarded as the deemed cost of the investment at initial recognition.
The Group has elected to apply this exemption for its joint venture company.
b) Ind AS mandatory exceptions
The Group has applied the following exceptions from full retrospective application of Ind AS as mandatorily required
under Ind AS 101:
i)
Hedge accounting
Hedge accounting can only be applied prospectively from the transition date to transactions that satisfy the
hedge accounting criteria in Ind AS 109 at that date. Hedging relationships cannot be designated retrospectively,
and the supporting documentation cannot be created retrospectively. As a result, only hedging relationships
that satisfied the hedge accounting criteria as of April 01, 2015 are reflected as hedges in the results of the
Group under Ind AS.
The Group had designated various hedging relationships as cash flows hedges under IGAAP. On date of
transition to Ind AS, the entity had assessed that all the designated hedging relationships for hedge accounting
as per Ind AS 109. Consequently, the Group continues to apply hedge accounting on and after the date of
transition to Ind AS.
ii) Estimates
Estimates in accordance with Ind AS at the transition date will be consistent with estimates made for the same
date in accordance with IGAAP (after adjustments to reflect any difference in Accounting Policies) unless there
is objective evidence that those estimates were in error.
Ind AS estimates as at April 01, 2015 are consistent with the estimates as at the same date made in conformity
with IGAAP. The Group made estimates for following items in accordance with Ind AS at the date of transition
as these were not required under IGAAP:
1) Investment in equity instruments carried at FVPL or FVOCI;
2) Impairment of financial assets based on expected credit loss model.
iii) Non-controlling interests
Ind AS 110 requires entities to attribute the profit or loss and each component of Other Comprehensive Income
to the owners of the parent and to the non-controlling interests. This requirement needs to be followed even if
this results in the non-controlling interests having a deficit balance. Ind AS 101 requires the above requirement
to be applied prospectively from the date of transition.
Consequently, the Group has applied the above requirement prospectively.
iv) Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the
facts and circumstances that exist at the date of transition to Ind AS.
Notes
to the Consolidated Financial Statements