tata consultancy services limited=depreciation policy

Depreciation Policy of TATA CONSULTANCY SERVICES LIMITED

Digesh ShahRoll No. – 29

TATA CONSULTANCY SERVICES LIMITED

SUMMARY:

In respect of Capital Assets that are not in the ownership of the company, the company follows the policy of depreciating them over their useful life or in 5 years whichever is less. Thus all the assets that have been taken on lease will be depreciated completely in a maximum of 5 years. In respect of all other assets, the company follows a policy of providing for depreciation on a straight line basis at the rates mentioned in Schedule XIV of Companies Act 1956 or on the basis of estimated useful life of the asset whichever is higher.

Freehold land is not depreciated, while leasehold land is amortized over the life of the lease. The policy of depreciating the Computer Equipments was 50% till March 31, 2008 which was reduced to 25% in the financial year 2008-2009. The company has not explicitly mentioned these changes in any of the applicable annual reports in Schedule Q. Thus the disclosures of policy changes are not clear.

During the Financial year 2004-2005, 2005-2006, 2006-2007 and 2007-2008, however the company’s depreciation policy was significantly same.


I) DEPRECIATION POLICY OF THE FY`09:

SCHEDULE ‘Q’- NOTES TO ACCOUNTS:

a) Depreciation:Depreciation other than on freehold land and capital work-in-progress is charged so as to write-off the cost of assets, on the following basis:

Particulars Method DepreciationLeasehold Land and Buildings Straight line Lease periodFreehold Buildings Written down value 5%Leasehold Improvements Straight line Lease periodPlant and Machinery Straight line 33.33%Computer Equipment Straight line 25%

(March 31, 2008: 50%)Motor Cars Written down value 25.89%Office Equipment Written down value 13.91%Electrical Installations Written down value 13.91%Furniture and Fixtures Straight line 100%Intellectual Property/Distribution Rights

Straight line 24-36 months

Fixed assets purchased for specific projects are depreciated over the period of the project.

II) DEPRECIATION POLICY OF THE FY`08:


b) Depreciation:Depreciation other than on freehold land and capital work-in-progress is charged so as to write-off the cost of assets, on the following basis:

Particulars Method DepreciationLeasehold Land and Buildings Straight line Lease periodFreehold Buildings Written down value 5%Leasehold Improvements Straight line Lease periodPlant and Machinery Straight line 33.33%Computer Equipment Straight line 50%Motor Cars Written down value 25.89%Office Equipment Written down value 13.91%Electrical Installations Written down value 13.91%Furniture and Fixtures Straight line 100%Intellectual Property/Distribution Rights




III) DEPRECIATION POLICY OF THE FY`07:


c) Depreciation:Depreciation other than on freehold land and capital work-in-progress is charged so as to write-off the cost of assets, on the following basis:




IV) DEPRECIATION POLICY OF THE FY`06:


d) Depreciation:Depreciation other than on freehold land and capital work-in-progress is charged so as to write-off the cost of assets, on the following basis:





V) DEPRECIATION POLICY OF THE FY`05:


e) Depreciation:Depreciation other than on freehold land and capital work-in-progress is charged so as to write-off the cost of assets, on the following basis:




tata consultancy services limited=depreciation policy

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