ACCOUNTING POLICIES

Use of estimates
Estimates have been used for provision for doubtful receivables, employee benets, provision for income taxes,
accounting for contract costs expected to be incurred, the useful lives of depreciable xed assets and provision for
impairment. Due to the use of estimates, there is a possibility of change in the future results since there will be a
difference in the estimated values and the actual values, during the period in which the estimates materialize.
Fixed assets
TCS states fixed assets at cost, less accumulated depreciation/amortization. Costs include the expenses incurred to
bring the assets to their present location and condition. Fixed assets excludes computers and other assets which
individually costs less than INR 50,000 which are not capitalized unless they are part of a larger capital investment
scheme.
Depreciation/ Amortization
Depreciation/amortization on xed assets other than on freehold land and capital work-in-progress is charged so as
to write-off the cost of the assets. Fixed assets purchased for specic projects are depreciated over the period of the
project.
Revenue recognition

Revenue from contracts priced on a time and material basis are recognized when services are rendered and
related costs are incurred.
Revenue from sale of software licenses are recognized upon delivery.
Revenue is reported net of discounts.

Taxation
Current income tax expense of TCS comprises taxes on income from operations in India and in foreign jurisdictions.
Minimum Alternative Tax (MAT) is recognized as an asset in the balance sheet when the asset can be measured
reliably and it is probable that the future economic benet associated with it will fructify. Deferred tax expense or
benet is recognized on timing differences being the difference between taxable income and accounting income.
Investments
Long-term investments and current maturities of long-term investments are stated at cost, less provision for other
than temporary diminution in value. Current investments, except for current maturities of long term investments, are
stated at the lower of cost and fair value.
Cash and Cash equivalents
TCS considers all highly liquid financial instruments that are readily convertible into known amounts of cash and
having original maturities of 3 months or less from the date of purchase as cash equivalents.
Foreign Currency Transactions
Income and expense in foreign currencies are converted at exchange rates prevailing on the date of the transaction.
Premium or discount on foreign currency forward, option and futures contracts are amortized and recognized in the
statement of prot and loss over the period of the contract.