Atul Ltd Annual Report 2016-17

Atul Ltd | Annual Report 2016-17

Note 1 Significant Accounting Policies

(continued)

Depreciation methods, estimated useful lives and residual value:

Depreciation is calculated using the straight-line method to allocate their cost, net of their residual values, over their

estimated useful lives or, in the case of certain leased furniture, fittings and equipment, the shorter lease term as follows:

Asset category

Estimated useful life

Buildings

30 years

Roads

5 years

Plant and equipment

6 to 20 years

Office equipment and furniture

5 to 10 years

Vehicles

6 to 10 years

Bearer plants

40 years

The useful lives have been determined based on technical evaluation done by the Management experts which are different from the

useful life prescribed in Part C of Schedule II to the Act, in order to reflect the actual usage of the assets. The residual values are not more

than 5% of the original cost of the asset. The residual values, useful lives and method of depreciation of property, plant and equipment

is reviewed at each financial year end and adjusted prospectively, if appropriate.

The property, plant and equipment including land acquired under finance lease is depreciated over the useful life of the

asset or over the shorter of the useful life of the asset and the lease term if there is no reasonable certainty that the Group

will obtain ownership at the end of the lease term.

The carrying amount of an asset is written down immediately to its recoverable amount if the carrying amount of the asset

is greater than its estimated recoverable amount.

Transition to Ind AS:

On transition to Ind AS, the Group has elected to continue with the carrying value of all of its property, plant and equipment

recognised as at April 01, 2015 measured under IGAAP as the deemed cost of the property, plant and equipment.

j) Intangible assets:

Goodwill:

Goodwill on acquisitions of subsidiary companies is included in intangible assets. Goodwill is not amortised but it is

tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be

impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity

include the carrying amount of Goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those

cash-generating units or Groups of cash-generating units that are expected to benefit from the business combination

in which the Goodwill arose. The units or Groups of units are identified at the lowest level at which Goodwill is

monitored for internal management purposes, which in our case are the operating Segments.

ii) Computer software:

Computer software includes enterprise resource planning project and other cost relating to such software which provides

significant future economic benefits. These costs comprise of license fees and cost of system integration services.

Computer software cost is amortised over a period of 3 years using straight-line method.

Transition to Ind AS:

On transition to Ind AS, the Group has elected to continue with the carrying value of intangible assets recognised as

at April 01, 2015 measured under IGAAP as the deemed cost of intangible assets.

k) Investment properties:

Property that is held for long-term rental yields or for capital appreciation or both, and that is not in use by the Group,

is classified as investment property. Land held for a currently undetermined future use is also classified as an Investment

property. Investment property is measured initially at its acquisition cost, including related transaction costs and where

applicable borrowing costs.

Transition to Ind AS:

On transition to Ind AS, the Group has elected to continue with the carrying value of all of its investment properties

recognised as at April 01, 2015 measured under IGAAP as the deemed cost of investment properties.

Notes

to the Consolidated Financial Statements