Page 123 - FBL AR 2019-20

CORPORATE STATUTORY FINANCIAL
OVERVIEW STATEMENTS STATEMENTS

Notes to the Standalone financial statements for the year ended March 31, 2020

Defined benefit costs are categorised as follows:
i) service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
ii) net interest expenses or income; and
iii) remeasurement
The Company presents the first two components of defined benefit costs in the statement of profit and loss in the line item
‘Employee benefits expense’. Curtailment gains and losses are accounted for as past service cost.
iii) Share-based payments:
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity
instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based transactions are
set out in note 58.
(a) Includes impact of market performance conditions (e.g. entity’s share price)
(b) Excludes impact of any service and non-market performance vesting conditions (e.g. profitability, sales growth targets and
remaining an employee of the entity over a specified time period), and
(c) Excludes the impact of any non-vesting conditions (e.g. the requirement for employees to save or hold shares for a specific
period of time)
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the
vesting period, based on the Company’s estimate of equity instruments that will eventually vest, with a corresponding increase in
equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest.
The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects
the revised estimate, with a corresponding adjustment to the “Share options outstanding account”.

(iv) Short term and other long term employee benefits: : A liability is recognised for benefits accruing to employees in respect of wages,
salaries and bonus in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid
in exchange for that service. Liabilities recognised in respect of short term employee benefits are measured at the undiscounted
amount of the benefits expected to be paid in exchange for the related service.
Liabilities recognised in respect of other long term employee benefits are actuarially measured at the present value of the estimated
future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.
(g) Income Taxes
Income Tax expense represents the sum of the tax currently payable and deferred tax.
i) Current tax:
Current tax is the amount of income taxes payable in respect of taxable profit for the year. Taxable profit differs from ‘profit before
tax’ as reported in the Standalone statement of profit and loss because of items of income or expense that are taxable or deductible
in other years and items that are never taxable or deductible under the Income Tax Act, 1961. The current tax is calculated using tax
rates that have been enacted or substantively enacted by the end of the reporting period.

Significant judgments are involved in determining the provision for income taxes including judgment on whether tax positions
are probable of being sustained in tax assessments. A tax assessment can involve complex issues, which can only be resolved over
extended time periods. The recognition of taxes that are subject to certain legal or economic limits or uncertainties is assessed
individually by management based on the specific facts and circumstances
ii) Deferred tax:
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit under the Income Tax Act, 1961.
Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognized
for all the deductible temporary differences to the extent that it is probable that taxable profits will be available against which
those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary
difference arises from the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit.

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