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« Mar 13
Accounting Policy Year : Mar '14
IT IS CORPORATE POLICY
 
 Convention
 
 To prepare financial statements in accordance with applicable
 Accounting Standards in India. A summary of important accounting
 policies is set out below. The financial statements have also been
 prepared in accordance with relevant presentational requirements of the
 Companies Act, 1956.
 
 Basis of Accounting
 
 To prepare financial statements in accordance with the historical cost
 convention modified by revaluation of certain Fixed Assets as and when
 undertaken.
 
 All assets and liabilities have been classified as current or
 non-current as per the Company''s normal operating cycle and other
 criteria set out in the revised Schedule VI to the Companies Act, 1956
 based on the nature of products and the time between the acquisition of
 assets for processing and their realisation in cash and cash
 equivalents.
 
 Fixed Assets
 
 To state Fixed Assets at cost of acquisition inclusive of inward
 freight, duties and taxes and incidental expenses related to
 acquisition. In respect of major projects involving construction,
 related pre-operational expenses form part of the value of assets
 capitalised. Expenses capitalised also include applicable borrowing
 costs, if any.
 
 To capitalise software where it is expected to provide future enduring
 economic benefits. Capitalisation costs include licence fees and costs
 of implementation/system integration services. The costs are
 capitalised in the year in which the relevant software is implemented
 for use.
 
 To charge off as a revenue expenditure all upgradation/ enhancements
 unless they bring similar significant additional benefits.
 
 Depreciation
 
 To calculate depreciation on Fixed Assets, Tangible and Intangible, in
 a manner that amortises the cost of the assets after commissioning,
 over their estimated useful lives or, where specified, lives based on
 the rates specified in Schedule XIV to the Companies Act, 1956,
 whichever is lower, by equal annual instalments. Leasehold properties
 are amortised over the period of the lease.
 
 To amortise capitalised software costs over a period of five years.
 
 Revaluation of Assets
 
 As and when Fixed Assets are revalued, to adjust the provision for
 depreciation on such revalued Fixed Assets, where applicable, in order
 to make allowance for consequent additional diminution in value on
 considerations of age, condition and unexpired useful life of such
 Fixed Assets; to transfer to Revaluation Reserve the difference between
 the written up value of the Fixed Assets revalued and depreciation
 adjustment and to charge Revaluation Reserve Account with annual
 depreciation on that portion of the value which is written up.
 
 Impairment of Assets
 
 To provide for impairment loss, if any, to the extent, the carrying
 amount of assets exceed their recoverable amount.  Recoverable amount
 is higher of an asset''s net selling price and its value in use. Value
 in use is the present value of estimated future cash flows expected to
 arise from the continuing use of an asset and from its disposal at the
 end of its useful life.
 
 Impairment losses recognised in prior years are reversed when there is
 an indication that the impairment losses recognised no longer exist or
 have decreased. Such reversals are recognised as an increase in
 carrying amounts of assets to the extent that it does not exceed the
 carrying amounts that would have been determined (net of amortisation
 or depreciation) had no impairment loss been recognised in previous
 years.
 
 Investments
 
 To state Current Investments at lower of cost and fair value; and Long
 Term Investments, including in Joint Ventures and Associates, at cost.
 Where applicable, provision is made to recognise a decline, other than
 temporary, in valuation of Long Term Investments.
 
 Inventories
 
 To state inventories including work-in-progress at lower of cost and
 net realisable value. The cost is calculated on weighted average
 method. Cost comprises expenditure incurred in the normal course of
 business in bringing such inventories to its location and includes,
 where applicable, appropriate overheads based on normal level of
 activity.  Obsolete, slow moving and defective inventories are
 identified at the time of physical verification of inventories and,
 where necessary, provision is made for such inventories.
 
 Revenue from sale of products and services
 
 To recognise Revenue at the time of delivery of goods and rendering of
 services net of trade discounts to customers and Sales tax/Value added
 tax recovered from customers but including excise duty on goods payable
 by the Company.  Net revenue is stated after deducting such excise
 duty.
 
 Investment Income
 
 To account for Income from Investments on an accrual basis, inclusive
 of related tax deducted at source. To account for Income from Dividends
 when the right to receive such dividends is established.
 
 Proposed Dividend
 
 To provide for Dividends (including income tax thereon) in the books of
 account as proposed by the Directors, pending approval at the Annual
 General Meeting.
 
 Employee Benefits
 
 To make regular monthly contributions to various Provident Funds which
 are in the nature of defined contribution schemes and such paid/payable
 amounts are charged against revenue including any shortfall in interest
 between the amount of interest realised by the investment and the
 interest payable to members at the rate declared by the Government of
 India. To administer such Funds through duly constituted and approved
 independent trusts with the exception of Provident Fund and Family
 Pension contributions in respect of Unionised Staff which are
 statutorily deposited with the Government.
 
 To administer through duly constituted and approved independent trusts,
 various Gratuity and Pension Funds which are in the nature of defined
 benefit / contribution schemes. To determine the liabilities towards
 such schemes, as applicable, and towards employee leave encashment by
 an independent actuarial valuation as per the requirements of
 Accounting Standard - 15 on Employee Benefits. To determine actuarial
 gains or losses and to recognise such gains or losses immediately in
 Statement of Profit and Loss as income or expense.
 
 To charge against revenue, actual disbursements made, when due, under
 the Workers'' Voluntary Retirement Scheme.
 
 Lease Rentals
 
 To charge Rentals in respect of leased premises and equipment to the
 Statement of Profit and Loss.
 
 To recognise rental income on assets given on operating lease on an
 accrual basis over the lease term in the Statement of Profit and Loss.
 
 Research and Development
 
 To write off all expenditure other than capital expenditure on Research
 and Development in the year it is incurred.
 
 Capital expenditure on Research and Development is included under
 Tangible Assets.
 
 Taxes on Income
 
 To provide Current tax as the amount of tax payable in respect of
 taxable income for the period, measured using the applicable tax rates
 and tax laws.
 
 To provide Deferred tax on timing differences between taxable income
 and accounting income subject to consideration of prudence, measured
 using the tax rates and tax laws that have been enacted or
 substantively enacted by the balance sheet date.
 
 Not to recognise Deferred tax assets on unabsorbed depreciation and
 carry forward of losses unless there is virtual certainty that there
 will be sufficient future taxable income available to realise such
 assets.
 
 Foreign Currency Transactions
 
 To account for transactions in foreign currency at the exchange rate
 prevailing on the date of transactions.  Gains/Losses arising on
 settlement of such transactions as also the translation of monetary
 items at period ends due to fluctuations in the exchange rates are
 recognised in the Statement of Profit and Loss.
 
 To account for differences between the forward exchange rates and the
 exchange rates at the inception of forward exchange contracts (other
 than those designated as cash flow hedges), as income or expense over
 the life of the contracts.
 
 To account for gains /losses arising on cancellation or renewal of
 forward exchange contracts (other than those designated as cash flow
 hedges) as income/expense for the period.
 
 To apply the principles of hedge accounting as set out in Accounting
 Standard - 30 Financial Instruments: Recognition and Measurement to
 those forward exchange contracts and currency options that are
 designated as cash flow hedges and, accordingly, to account for the
 changes in the fair value of such contracts, to the extent that they
 are effective, directly in the Hedging Reserve Account, and to take the
 ineffective portion to the Statement of Profit and Loss. To recognize
 in the Statement of Profit and Loss the balance in the Hedging Reserve
 Account when the hedged item affects the profit or loss.
 
 To recognise the net mark to market losses in the Statement of Profit
 and Loss on the outstanding portfolio of forward exchange contracts and
 currency options, other than those designated as cash flow hedges, as
 at the Balance Sheet date, and to ignore the net gain, if any.
 
 To accumulate exchange differences arising on monetary items that, in
 substance, form part of the Company''s net investment in a non-integral
 foreign operation in a foreign currency translation reserve. To
 recognise such balances in the Statement of Profit and Loss on disposal
 of the net investment.
 
 Claims
 
 To disclose claims against the Company not acknowledged as debts after
 a careful evaluation of the facts and legal aspects of the matter
 involved.
 
 Segment Reporting
 
 To identify segments based on the dominant source and nature of risks
 and returns and the internal organisation and management structure.
 
 To account for inter-segment revenue on the basis of transactions which
 are primarily market led.
 
 To include under Unallocated Corporate Expenses revenue and expenses
 which relate to initiatives/costs attributable to the enterprise as a
 whole and are not attributable to segments.
 
 Financial and Management Information Systems
 
 To practice an Accounting System which unifies Financial and Cost
 Records and is designed to comply with the relevant provisions of the
 Companies Act, provide financial and cost information appropriate to
 the businesses and facilitate Internal Control.
Source : Dion Global Solutions Limited
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