Annual Report cb smile - Jet Airways

Significant Accounting Policies and Notes to Accounts (contd.)
G. FIXED ASSETS :
a) Tangible Assets:
Owned tangible fixed assets are stated at cost and includes amount added on revaluation less accumulated
depreciation and impairment loss, if any. All costs relating to acquisition and installation of fixed assets upto
the time the assets get ready for their intended use are capitalised.
The cost of improvements to Leased Properties as well as customs duty / modification cost incurred on aircraft
taken on operating lease have been capitalised and disclosed appropriately.
b) Intangible Assets:
Intangible assets are recognized only if acquired and it is probable that the future economic benefits that are
attributable to the assets will flow to the enterprise and the cost of assets can be measured reliably. The
intangible assets are recorded at cost and are carried at cost less accumulated amortisation and accumulated
impairment losses, if any.
c) Assets Taken on Lease:
i) Operating Lease: Rentals are expensed with reference to the Lease Term and other considerations.
ii) Finance Lease / Hire Purchase: The lower of the fair value of the assets and the present value of the
minimum lease rentals is capitalised as Fixed Assets with corresponding amount shown as Lease Liability
(Outstanding Hire Purchase / Finance lease Installments). The principal component of the lease rentals
is adjusted against the leased liability and interest component is charged to the Profit and Loss Account.
H. IMPAIRMENT OF ASSETS :
An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss,
if any, is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The
impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of
recoverable amount.
I. DEPRECIATION / AMORTISATION :
a) Depreciation on tangible fixed assets has been provided at the rates and in the manner prescribed under the
schedule XIV to the Companies Act, 1956 on Written Down Value method, other than Narrow and Wide Body
aircraft which are depreciated on straight line method. Expenditure incurred on improvements of assets acquired
on operating lease is written off evenly over the balance period of the lease. Premium on leasehold land is
amortised over the period of lease.
b) On amounts added on revaluation, depreciation is charged over the residual life and the additional charge of
depreciation is withdrawn from the Revaluation Reserve.
c) Intangible assets are amortised on straight line basis as follows.
i) Landing Rights acquired are amortised over a period not exceeding 20 years. Amortization period exceeding
10 years is applied considering industry experience and expected asset usage.
ii) Trademarks are amortised over 10 years.
iii) Computer Software is amortised over a period not exceeding 36 months.
J. INVESTMENTS :
Current Investments are carried at lower of cost and quoted / fair value. Long Term Investments are stated at cost.
Provision for diminution in the value of long-term investments is made only if such a decline is other than
temporary.
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