FRA Assignment

Ind AS 16_PPE_ Maruti Suzuki

Property, plant and equipment are stated at cost of acquisition or construction less
accumulated depreciation less accumulated impairment, if any. Freehold land is measured
at cost and is not depreciated. Such assets are classified to the appropriate categories of
property, plant and equipment when completed and ready for intended use.
Subsequent costs are included in the asset's carrying amount or recognised as a separate
asset, as appropriate, only when it is probable that future economic benefits associated
with the item will flow to the Company and the cost of the item can be measured reliably.
The carrying amount of any component accounted for as a separate asset is derecognised
when replaced. Other repairs and maintenance of revenue nature are charged to profit or
loss during the reporting period in which they are incurred. An item of property, plant and
equipment is derecognised upon disposal or when no future economic benefits are
expected to arise from continued use of asset. Any gain or loss arising on the disposal or
retirement of an item of property, plant and equipment is determined as the difference
between the sales proceeds and the carrying amount of asset and recognised in profit or
loss.
Depreciation methods, estimated useful lives and residual value Depreciation is calculated
using the straight-line method on a pro-rata basis from the month in which each asset is put
to use to allocate their cost, net of their residual values, over their estimated useful lives.
Estimated useful life of assets are as follows which is based on technical evaluation of the
useful lives of the assets:

Building 3-60 years

Plant and machinery other than Dies and 8 years
Jigs
Dies and jigs 5 years
Electronic data processing equipment 3 years
Furniture and fixtures 10 years
Office appliances 5 years
Vehicles 8 years

The assets residual values, estimated useful lives and depreciation method are reviewed at
the end of each reporting period, with the effect of any changes in estimate accounted for
on a prospective basis. All assets, the individual written down value of which at the
beginning of the year is Rs. 5,000 or less, are depreciated at the rate of 100%. Assets
purchased during the year costing Rs. 5,000 or less are depreciated at the rate of 100%.
Gains and losses on disposal are determined by comparing proceeds with carrying amount
and are credited / debited to profit or loss. Freehold land and Leasehold land in the nature
of perpetual lease is not amortised.
Ref- Audit Report of Maruti Suzuki
 Ind AS 16_PPE_Tata Motors
Property, plant and equipment are stated at cost of acquisition or construction less
accumulated depreciation less accumulated impairment, if any. Freehold land is measured
at cost and is not depreciated. Cost includes purchase price, taxes and duties, labour cost
and direct overheads for self-constructed assets and other direct costs incurred up to the
date the asset is ready for its intended use. Interest cost incurred for constructed assets is
capitalized up to the date the asset is ready for its intended use, based on borrowings
incurred specifically for financing the asset or the weighted average rate of all other
borrowings, if no specific borrowings have been incurred for the asset. The useful lives are
reviewed at least at each year end. Changes in expected useful lives are treated as change in
accounting estimates. Assets held under finance leases are depreciated over their expected
useful lives on the same basis as owned assets or, where shorter, the term of the relevant
lease.
Depreciation is not recorded on capital work-in-progress until construction and installation
are complete and the asset is ready for its intended use.
Ref- Audit Report of Tata Motors