Amal Ltd 2020-21

Amal Ltd | Annual Report 2020-21 Critical estimates and judgements Preparation of the Standalone Financial Statements require use of accounting estimates, judgements and assumptions, which by definition, will seldom equal the actual results. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the Standalone Financial Statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the Standalone Financial Statements. This Note provides an overview of the areas that involve a higher degree of judgements or complexity and of items, that are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the Standalone Financial Statements. The areas involving critical estimates or judgements are: i) Estimation for income tax: Note 1 (e) ii) Estimation of useful life of tangible assets: Note 1 (g) iii) Estimation of provision for inventories: Note 1 (l) iv) Allowance for credit losses on trade receivables: Note 1 (j) v) Estimation of defined benefit obligations: Note 1 (r) vi) Fair value measurements: Note 25.6 vii) Impairment: Note 1 (h) Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.