2.7 Property, plant and equipment

Accounting policy

Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by management. The charge in respect of periodic depreciation is derived at after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. The Group depreciates property, plant and equipment over their estimated useful lives using the straight-line method. The estimated useful lives of assets are as follows:


Buildings		22 - 25 years
Plant and machinery(1)		5 years
Computer equipment		3-5 years
Furniture and fixtures		5 years
Vehicles		5 years
Leasehold improvements		Lower of useful life of the asset or lease term

(1)

Includes solar plant with a useful life of 25 years.

Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end. The useful lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date and the cost of assets not ready to use before such date are disclosed under ‘Capital work-in-progress’. Subsequent expenditures relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Group and the cost of the item can be measured reliably. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset.

Impairment

Property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

If such assets are considered to be impaired, the impairment to be recognized in the net profit in the statement of comprehensive income is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the net profit in the statement of comprehensive income if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated depreciation) had no impairment loss been recognized for the asset in prior years.

Following are the changes in the carrying value of property, plant and equipment for fiscal 2024:


	(Dollars in millions)
		Land			Buildings			Plant and machinery			Computer equipment			Furniture and fixtures			Vehicles			Total
Gross carrying value as of April 1, 2023			174			1,407			625			1,037			409			6			3,658
Additions			—			36			40		112				24			—			212
Deletions*			—			(7	)		(19	)		(102	)		(20	)		—			(148	)
Translation difference			(3	)		(25	)		(9	)		(15	)		(7	)		—			(59	)
Gross carrying value as of March 31, 2024			171			1,411			637			1,032			406			6			3,663
Accumulated depreciation as of April 1, 2023			—			(552	)		(468	)		(709	)		(300	)		(5	)		(2,034	)
Depreciation			—			(54	)		(56	)		(167	)		(47	)		—			(324	)
Accumulated depreciation on deletions*			—			7			18			101			19			—			145
Translation difference			—			9			8			10			6			—			33
Accumulated depreciation as of March 31, 2024			—			(590	)		(498	)		(765	)		(322	)		(5	)		(2,180	)
Capital work-in-progress as of March 31, 2024																				54
Carrying value as of March 31, 2024			171			821			139			267			84			1			1,537
Capital work-in-progress as of April 1, 2023																					55
Carrying value as of April 1, 2023			174			855			157			328			109			1			1,679

* During fiscal 2024, certain assets which were not in use having gross book value of $93 million (net book value: Nil), were retired

Following are the changes in the carrying value of property, plant and equipment for fiscal 2023:


	(Dollars in millions)
		Land			Buildings			Plant and machinery			Computer equipment			Furniture and fixtures			Vehicles			Total
Gross carrying value as of April 1, 2022			188			1,481			653			1,125			423			6			3,876
Additions - Business Combination (Refer to Note 2.10)			—			—			1			1			—			—			2
Additions			—			42			57		187				62			—			348
Deletions*			—			—			(32	)		(191	)		(45	)		—			(268	)
Translation difference			(14	)		(116	)		(54	)		(85	)		(31	)		—			(300	)
Gross carrying value as of March 31, 2023			174			1,407			625			1,037			409			6			3,658
Accumulated depreciation as of April 1, 2022			—			(541	)		(484	)		(796	)		(324	)		(5	)		(2,150	)
Depreciation			—			(54	)		(58	)		(164	)		(44	)		—			(320	)
Accumulated depreciation on deletions*			—			—			32			190			44			—			266
Translation difference			—			43			42			61			24			—			170
Accumulated depreciation as of March 31, 2023			—			(552	)		(468	)		(709	)		(300	)		(5	)		(2,034	)
Capital work-in-progress as of March 31, 2023																				55
Carrying value as of March 31, 2023			174			855			157			328			109			1			1,679
Capital work-in-progress as of April 1, 2022																					67
Carrying value as of April 1, 2022			188			940			169			329			99			1			1,793

* During fiscal 2023, certain assets which were not in use having gross book value of $234 million (net book value: Nil), were retired

Following are the changes in the carrying value of property, plant and equipment for fiscal 2022:


	(Dollars in millions)
		Land			Buildings			Plant and machinery			Computer equipment			Furniture and fixtures			Vehicles			Total
Gross carrying value as of April 1, 2021			191			1,445			679			1,045			416			6			3,782
Additions		4			81			47			206			26				—		364
Deletions			—			—			(50	)		(90	)		(7	)		—			(147	)
Translation difference			(7	)		(45	)		(23	)		(36	)		(12	)		—			(123	)
Gross carrying value as of March 31, 2022			188			1,481			653			1,125			423			6			3,876
Accumulated depreciation as of April 1, 2021			—			(503	)		(492	)		(771	)		(294	)		(4	)		(2,064	)
Depreciation			—			(56	)		(57	)		(141	)		(45	)		(1	)		(300	)
Accumulated depreciation on deletions			—			—		47			90			6				—			143
Translation difference			—			18			18			26			9			–			71
Accumulated depreciation as of March 31, 2022			—			(541	)		(484	)		(796	)		(324	)		(5	)		(2,150	)
Capital work-in-progress as of March 31, 2022																				67
Carrying value as of March 31, 2022			188			940			169			329			99			1			1,793
Capital work-in-progress as of April 1, 2021																					145
Carrying value as of April 1, 2021			191			942			187			274			122			2			1,863

* During fiscal 2022, certain assets which were not in use having gross book value of $43 million (net book value: Nil), were retired

The aggregate depreciation expense is included in cost of sales in the consolidated statement of comprehensive income.

Repairs and maintenance costs are recognized in the consolidated statement of comprehensive income when incurred.

Consequent to the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 (“the Rules”), the Company was required to transfer its CSR capital assets installed prior to January 2021. Towards this the Company had incorporated a subsidiary ‘Infosys Green Forum’ (IGF) under Section 8 of the Companies Act, 2013. During the year ended March 31, 2022, the Company had completed the transfer of assets upon obtaining the required approvals from regulatory authorities, as applicable. During March 31, 2024, the application filed by IGF for registration u/s.12AB of the Income Tax Act was rejected and registration cancelled. IGF is in the process of challenging the rejection order.

The Group had contractual commitments for capital expenditure primarily comprising of commitments for infrastructure facilities and computer equipment aggregating to $94 million and $117 million as of March 31, 2024, and March 31, 2023, respectively.