Policy Assignment- Accounting

TARGET ENTITY NESTLE INDIA

LTD(NIL)

SUBMITTED BY:
- ANKIT PRAKASH (ROLL NO. 11)
Revenue Recognition: NIL
 According to NIL’s 2016-17 Annual Report, the company recognized revenue from sale of goods is
recognised on transfer of significant risks & rewards of ownership and effective control to the buyer.
 Revenue is measured at the price charged to the customer and are recorded net of returns (if any),
trade discounts, rebates, other pricing allowances to trade/consumer, when it is probable that
the associated economic benefits will flow to the company.
 Sales are presented gross of excise duty and net of Goods and Services Tax (GST), Value Added
Tax (VAT)/ Sales Tax, wherever applicable. In accordance with Ind AS 18 on “Revenue” and
Schedule III to the Companies Act, 2013, Sales for the previous year ended 31 December 2016 and
for the period 1 January to 30 June 2017 were reported gross of Excise Duty and net of Value
Added Tax (VAT)/ Sales Tax.
 Excise Duty was reported as a separate expense line item. Consequent to the introduction of Goods
and Services Tax (GST) with effect from 1 July 2017, VAT/Sales Tax, Excise Duty etc. have been
subsumed into GST and accordingly the same is not recognised as part of sales as per the
requirements of Ind AS 18.
 Interest income is recognised using effective interest rate (EIR) method.
 Dividend income on investments is recognised when the right to receive the payment is
established..
Depreciation Policy: NIL
 The Company has assessed the useful lives of fixed assets as per Schedule II to the Companies
Act, 2013. Accordingly, depreciation has been computed on useful lives based on technical
evaluation of relevant class of assets including components thereof. Useful lives and residual
values are reviewed annually. Depreciation is provided as per the straight line method
computed basis useful lives of fixed assets as follows:
Asset Useful Life
Buildings 25-40years
Furniture and fixtures 05-25years
Office Equipments 5 years
Furniture and fixtures 5 years
Vehicles 5 years
Information technology equipment 5 years
Moulders, cutters and spare parts* 2-3 year

*Freehold land is not depreciated. Leasehold land and related improvements are amortized over
the period of the lease
Amortization Policy:NIL
 Financial assets that are held within a business model whose objective is to hold the asset in
order to collect contractual cash flows that are solely payments of principal and interest are
subsequently measured at amortised cost less impairments, if any. Interest income calculated
using effective interest rate (EIR) method and impairment loss, if any are recognised in the
statement of profit and loss.
 - Financial liabilities are classified as financial liabilities at amortised cost by default. Interest
expense calculated using EIR method is recognised in the statement of profit and loss.
Inventory Valuation Policy: NIL
 Inventories are valued as under:
 INVENTORY VALUATION METHOD

Finished Goods (Trading) : At lower of Cost or Net realisable value.

Cost is determined on (Trading)‘Weighted
Average’ basis.

Machinery Parts : At lower of Cost or Net realisable value.

Cost is determined on ‘Weighted Average’
basis. Due provision for obsolescence and
wear & Tear is Made