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• Annual Report 2018-19
Shaping the future of software driven business
income. All other changes in fair value of liabilities designated as FVTPL are recognized in the statement of profit and
loss. The Group has not designated any financial liability as at FVTPL.
Derecognition
The Group derecognises financial liabilities when the Group’s obligations are discharged, cancelled or have expired.
The difference between the carrying amount of the financial liability derecognised and the consideration paid and
payable is recognised in profit or loss.
(h) Impairment
i) Financial assets
The Group applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on
financial assets measured at amortized cost and financial assets that are debts instruments and are measured at fair
value through other comprehensive income (FVTOCI). ECL is the difference between contractual cash flows that are
due and the cash flows that the Group expects to receive, discounted at the original effective interest rate.
For trade receivables, the Group recognizes impairment loss allowance based on lifetime ECL at each reporting
date, right from its initial recognition. For other financial assets, the Group determines whether there has been a
significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12 month
ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used.
ii) Non-financial assets
The carrying amounts of Property, Plant and Equipment and Goodwill are reviewed at each balance sheet date or
whenever there is any indication of impairment based on internal/external factors. If any indications exist, the Group
estimates the asset’s recoverable amount.
In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount
of the asset (or CGU) is reduced to its recoverable amount. The recoverable amount is the greater of the asset’s fair
value and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks
specific to the asset. An impairment loss is recognised in the statement of profit and loss.
Recoverable amount of intangible under development that is not yet available for use is estimated at least at each
financial period / year end even if there is no indication that the asset is impaired.
(i) Borrowing costs
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of
borrowings.
Borrowing costs directly attributable to the acquisition, construction or development of an asset that necessarily takes
a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective
asset. All other borrowing costs are expensed in the year they occur.
Amendment to Ind AS 23 Borrowing costs:
The amendments clarify that if any specific borrowing remains outstanding
after the related asset is ready for its intended use or sale, that borrowing becomes part of the funds that an entity
borrows generally when calculating the capitalisation rate on general borrowings. The Group does not expect any impact
related to this amendment.
(j) Leases
Where the Group is a lessee
Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are
classified as operating leases.
Operating lease payments are recognized as an expense in the statement of profit and loss as per the terms of the lease
agreements.
Ind AS 116 Leases:
On March 30, 2019, Ministry of Corporate Affairs has notified Ind AS 116, Leases. Ind AS 116 will replace
the existing leases Standard, Ind AS 17 Leases, and related Interpretations. The Standard sets out the principles for the
recognition, measurement, presentation and disclosure of leases for both parties to a contract i.e., the lessee and the
Notes forming part of consolidated financial statements (Contd.)