Page 256 - BCML AR 2019-20

FINANCIAL STATEMENTS

Notes forming part of the Consolidated Financial Statements

Note No. : 3 Use of critical estimates, judgments and assumptions

The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of
judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and
volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
(v) Provisions, contingent liabilities and contingent assets
The timing of recognition and quantification of the provisions, contingent liabilities and contingent assets require the application
of judgment to existing facts and circumstances which are subject to change on the actual occurrence or happening. Judgment
is required for estimating the possible outflow of resources, if any, in respect of contingencies/claims/litigations against the
Company and possible inflow of resources in respect of the claims made by the Company which has been considered to be
contingent in nature. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

254 | Balrampur Chini Mills Limited