ACCOUNTING

ASSIGNMENT
COMPANY NAME :- BAJAJ AUTO
1. Revenue Recognition Policy
2. Depreciation Policy
3. Amortization Policy
4. Inventory Valuation Policy

NAME:- NAND BHUSHAN

ROLL NUMBER:- 31NMP35
 REVENUE RECOGNITION

• Bajaj Auto follows FOB destination policy to recognize revenue.

• Domestic sales are accounted for on dispatch from the point of sale corresponding to
transfer of significant risks and rewards of ownership to the buyer.
• Export sales are recognized on the date of the mate's receipt/shipped on board
signifying transfer of risks and rewards of ownership to the buyer as per terms of sale
and initially recorded at the relevant exchange rates prevailing on the date of the
transaction.
 DEPRECIATION POLICY

i) Depreciation is provided on a pro rata basis on the straight line method to allocate the
cost, net of residual value over the estimated useful lives of the assets.
ii) Useful life of assets are determined by the Management by internal technical
assessments except in case where such assessment suggests a life significantly different
from those prescribed by Schedule II- Part ‘C’, the useful life is as assessed and certified
by a technical expert.
iii) Assets which are depreciated over useful life/residual value different than those
indicated by Schedule II are Aircraft and PDC Dies with estimated useful life of 10 years
and 3 years.
iv) Depreciation on additions is being provided on pro rata basis from the month of such
additions
v) An impairment loss is recognized for the amount by which the asset’s carrying amount
exceeds its recoverable amount.
 AMORTIZATION POLICY

• Under previous GAAP, certain debt instruments were measured at cost including pre-
acquisition interest. This had impacted amortisation of premium/discount on those
investments.
• Under Ind AS, these investments have been remeasured at cost excluding pre-
acquisition interest and amortisation has been accordingly reworked.
• Under Ind AS, these investments have been remeasured at cost excluding pre-
acquisition interest and amortisation has been accordingly reworked.
• The cost of technical know-how developed is amortised equally over its estimated
useful life i.e. generally three years from the date of commencement of commercial
production.
 INVENTORY VALUATION METHOD

• Finished stocks of vehicles and auto spare parts and stocks of work-in-progress are
valued at cost of manufacturing or net realisable value whichever is lower , on
weighted average basis. Cost of finished stocks of vehicles lying in the factory
premises, branches, depots are valued inclusive of excise duty.
• Stores, packing material and tools are valued at cost arrived at on weighted average
basis or net realisable value, whichever is lower.
• Raw materials and components are valued at cost arrived at on weighted average
basis or net realisable value, whichever is lower, as circumstances demands.
• Goods in transit are stated at actual cost incurred up to the date of Balance Sheet.